If New Hampshire's legislature implements the advice of a committee chaired by Mayor Charles Sununu, New Hampshire is about to become a national leader in cryptocurrency. The proposal also creates a legal framework for the state's blockchain and data encryption business processes, giving image quality and predictability to entrepreneurs and regulators, while avoiding the cumbersome and largely meaningless unique rules that federal regulators and congressmen need to impose on the industry. The proposed rules will also protect customers, depositors and investors.

Blockchain technology business processes now have some kind of black zone of laws and regulations in the United States. The US Congress has provided little support to regulators, leading to confusion and challenges in maintaining compliance. This increases unnecessary costs and sometimes causes companies to do things that conflict with each other. The responsibility for regulating these companies is shared between the Stock and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).

Because these institutions regulate different types of things, but they have different ways, it is not even clear which organization has the power. Because of the lack of clarity, many cryptocurrency trading centers and enterprises have transferred their business and company registrations from the United States to China, which has less control. Bermuda, the Bahamas, Antigua and Barbuda and Cyprus are popular offshore account addresses.

CoinbaseCEO Bobby Armstrong showed last year that regulatory variability boosted 95 per cent of offshore account transactions. "penalize American companies... "it doesn't make sense. He wrote on Twitter. Circle moved its trading center to Bermuda in 2019, while Fidelity Investment (Fidelity Investments) was forced to give it to an exchange-traded bitcoin fund in Canada in 2021. Data Perlian Brin, the current president of the Congressional General Chamber of Commerce, attributes offshore business to variability. "they don't want to operate in a black zone because of hidden law enforcement problems hanging over his head," he said. "

The New Hampshire framework will clear this black zone, set rules on how regulators should treat digital currencies-as securities, commodity spot or loan currencies-and help ensure that they comply with AML and fraud rules. While officials will face attracting data encryption companies to work in the Caribbean, a new start-up will benefit as the new rules are likely to attract more bored venture capitalists.

Such confusion and variability are not only bad for the field, which continues to improve. The strict rules that federal agencies and congressmen need to impose may be even worse. They will destroy an area that has an important impact on the economy-not just people buying and selling mutton (Doge) or orangutan pictures. For example, some companies are using blockchain ledgers to symbolize the real estate industry to help us become homeowners without the high down payments and monthly costs of traditional mortgages. In the long run, obliterating the craze of blockchain markets will also harm the interests of the United States, where much of its "innovation" is related to our own well-regulated financial institutions and access to a lot of assets, and the dollar is a global reserve currency. As login passwords become more popular and receive more and more attention from government departments in other countries, weakening domestic industries may diminish our own ability to innovate.

To some extent, such doubts stem from suspicions about cryptocurrencies. Some of the high-profile cases that have led to criminal charges, such as the ancient Silk Road industry and FTX--, give the impression that cryptocurrencies are only used for "dark networks", Ponzi schemes and other illegal activities. Therefore, compared with banks and other companies, companies that buy and sell IT need more supervision and supervision. But as the committee talks about, the reality is that more financial crimes involve traditional money and companies. (since 2016, Wells Fargo has paid more than $7 billion in penalties and mediation related to illegal activities.)

In order to enable companies with distributed books to have a solid legal foundation, the committee has put forward three key proposals: China should be able to maintain the decentralized autonomous organization (DAO) by limited liability companies, create "blockchain technical objection case materials" in the court system, and allow legislative committees to upgrade the latest laws and regulations, such as the uniform Commercial Code and the State Securities Law.

Another concern that distinguishes New Hampshire from skeptical federal regulators is its commitment to privacy and property. The EU National Commission stressed that the proposed rules of the Financial Crime Inspection Network require financial enterprise data records to verify the identity of owners involved in the trading of encrypted currencies, only because cryptocurrencies are likely to be used to support criminal offences or terrorist organizations. This is not only an absurd demand, not suitable for other businesses, but also creates a system loophole that Internet suspects can take advantage of so that they can browse a large database of their own information.

The committee accurately proposed, "because financial companies or money service companies set up platforms to provide encrypted asset services to users with encrypted assets, such centralized institutions must comply with and apply Cash." Financial companies that provide services to customers have the same BSA/AML rules in bsa/aml rules and regulations. In the past, there should be a high standard of proof that put more pressure on password service companies.

McGinnis Hemingway, the New Hampshire cryptocurrency promoter and the person responsible for the current policy of the Tron Dao, allowed the committee to work. She said in an email to me: "the committee's position and recommendations clearly demonstrate the fighting spirit of 'either at will or die'. The fighting spirit is in harmony with the fighting spirit of encrypted currency. "

Money laundering is a serious crime, but it is not unique to cryptocurrency. Inspection officials said that because of the clarity of the block chain, it is easier to avoid such things by applying data encryption. On the advice of the New Hampshire Executive Board, it will become the socio-economic manager of digital money and give federal agencies and due process a manual on how to do the right thing.

Brandon Cochranis a partner at YK Law LLP, where he focuses on blockchain and cryptocurrency issues, and an adjunct professor at Suffolk University Law School teaching Blockchain, Cryptocurrency and the Law. He is also the principal and founder of CryptoCompli, a startup focused on the compliance needs of cryptocurrency businesses.