Thread by @JBSDC

The deep dive into the bill is finished (see the QT for the thread). Here are a few overall thoughts on the bill and its prospects for passage.

Short thread.

https://twitter.com/jbsdc/status/1664791786038935552

Overall, the McHenry-Thompson bill (which actually has no name yet) is a strong effort at crafting a comprehensive regulatory regime for crypto.

There are some key issues, but per others, it’s clear the staffs of both committees really tried to square some of the hard circles about regulating crypto. That’s to be commended. 3

The bill lays out a process for getting networks deemed decentralized but it is complicated. 4

https://twitter.com/JBSDC/status/1664804764532584448?s=20

That said, the bill may also solve the problem of airdrops not being allowed in the US in one fell swoop.

https://twitter.com/JBSDC/status/1664799964415795201?s=20

The main outstanding questions I have are:
- What part of this bill applies directly to DeFi?
- Can a network be deemed decentralized at launch?
- How will Democrats in Congress respond to it (they weren’t that involved in drafting it)?
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Now, it’s clear that this bill won’t clear 60 votes in the Senate in its current form.

So this bill is probably lighter touch than can actually become law this Congress.

https://twitter.com/dlauer/status/1665008347492302850?s=20

This is, almost certainly, the bill with the best chance of becoming law before the 2024 presidential election scrambles the board. Even in its current form, it’s not everything the industry wants, and the SEC will likely oppose it, as they are now opposing all legislation.

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So we all face a time of choosing. For the industry, Congress, and regulators. This bill will have a tough path to become law, as all bills do. 2025 may result in a more favorable Congress to crypto of course, but elections are always uncertain.
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Democrats should also be thinking that this may be their best chance to legislate on crypto.

If courts do find against key agencies in some key cases, this bill may end up being far tougher than anything that could pass into law in the next decade.
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The next step for the bill is stakeholder engagement - the authors will likely be seeking comments from industry participants, academics, non-profits, and even ordinary users.
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Following that, there will be a mark-up of the bill in committee, then passage on the House floor. As noted at the top of the thread, a lot of Democrats will need to support the bill for it to have a chance in the Senate. 12

https://twitter.com/jbsdc/status/1664793716941283329?s=46&t=V3Rhpx5EfEycOYjbLLg4wQ

I’ll be watching the list of sponsors closely. If a decent number of Democrats say they support the bill before the markup, this bill could really become law.

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Anyway, thanks for reading and the kind remarks. It’s always a privilege to do this for the community, those of you that are pro, neutral, and anti crypto alike. 14

These kind of analyses are the closest thing in policy to open-source contributions and a chance to provide some illumination on the misty process of DC is a real joy.