If the Warren-Marshall legislation fails the necessary test, does it do more harm than good? After all, money laundering is terrible. Shouldn’t the legislation be passed even if it only helps on the margins? Here is where the harms of the legislation, namely requiring those that develop software and validate transactions on a blockchain to register as financial institutions, are so problematic. The problem is these individuals can’t practically register as a financial institution. The authors of this legislation know this and further know that requiring software developers and validators to engage in the same kind of multi-million dollar compliance regime that banks do would collapse the crypto economy, which, after all, is the point.
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