Law & Policy

Solopreneur. Creating U.S. crypto policy content. Carter & Jack’s dad 🙏 Prev. Sen. Cornyn; Litigation @ Milbank. https://www.caphillcrypto.com/about 


Thanks @caphillcrypto for the excellent summary of the DeFi broker regulations in your newsletter today. I only had a couple of minor nits to pick with your explanation of the rules. Details to follow:

First the definition of digital asset middleman in §1.6045-1(a)(21) is not quite as you have described it. It is a person who is responsible for providing an effectuating service, which includes a trading front-end service wherein the nature of the service is such that the service provider ordinarily would know or be in a position to know the nature of the transaction. Being in a position to know the identity of the party making the sale was dropped from the final regulations, because Treasury concluded that trading front-end service providers already have access to customer information and therefore can be presumed to know the identity of the party making the sale.