Your comment is pretty unrelated to the article. It sounds like you're talking about a simple sending of cryptocurrency from one business or individual or another, but that's not what the article is talking about.
It is impossible to report "who" you received an asset from if you received it from a smart contract that is not under the control of any one business or individual. In the cases of most defi contracts, the assets involved are pooled from many thousands of individuals and act as a sort of autonomous market maker.
Cases where criminals obfuscate simple transfers are already prosecuted under money laundering laws, and they are very easy to prosecute because blockchains are a completely open record for anyone to data-mine.
If research into and use of financial smart contracts should be shut down immediately in the US, let them debate and make a law about that. Don't sneak it into a monster bill and pretend that it's about something entirely different.
> smart contract that is not under the control of any one business or individual
This doesn't mean it's not under control of someone or a group of people. Claiming it's not under control just means you're hiding the true controller, which might be an embargoed entity like Iran.
If you have to submit a 1,000 long list of people each of whom has a fragment of control, so be it. Or spend a few dollars getting a Delaware corp.
Barring specific features like admin contracts or governance tokens, it is possible to have a smart contract that is not under control of someone or a group of people. Contract bytecode gets uploaded to Ethereum (potentially anonymously, and potentially generated by a computer). It then does exactly what the smart contract says it does, including potentially trading or transacting digital assets, in perpetuity, for as long as there exists at least one Ethereum node on earth. By default, smart contracts can't be modified by anyone, not even their creator.
This strikes me like Indiana legislating the value of pi. There exists a natural world out there, beyond human influence, and certain computer programs (particularly ones on Ethereum, where they run on all computers, not one computer) effectively become part of the natural world. The law is set up on the assumption that all actions are ultimately caused by a human or organization, but this may not be a valid assumption anymore.
> it is possible to have a smart contract that is not under control of someone or a group of people. Contract bytecode gets uploaded to Ethereum (potentially anonymously, and potentially generated by a computer). It then does exactly what the smart contract says it does, including potentially trading or transacting digital assets, in perpetuity, for as long as there exists at least one Ethereum node on earth.
If I may translate this in to politician speak, you're saying that the Iranian government and other OFAC-sanctioned entities can create autonomous fiscal cyberweapons which cannot be turned off?
(Requires a bit of imagination to do this without oracles, which are obviously a weak spot, but you could imagine having an autonomous bug bounty program that can automatically validate and pay out certain kinds of exploits. Self-funding ransomware?)
If there can be autonomous organizations, there can be autonomous crimes, and that is not a stable situation.
I understand the position that we should just handle it like cash because that seems obvious but consider that you risk killing a potentially very large new industry and area of consumption in it's crib by insisting that it must be able to behave within the framework of the current reality because that's how it is right now. For example what if peer to peer connections on the internet had been banned because a user is not allowed to operate their own phone exchange and come on, directly connecting with someone on a data line is basically the exact same thing as connecting with someone on a voice line. It should be done in a smart way, finding new ways to accomplish the goals if it's going to stifle innovation and put the USA behind other countries in the world.
The only people who could be said to be "in control of" a smart contract are the miners or validators producing blocks. But they are just executing the code of the blockchain and the smart contract, and if any one of them didn't do it, someone else would with no interruption of the network's functioning. So it is a real logical stretch to assert that they have any control.
"few dollars"? More like a couple of hundred, some of that on-going and yes, it costs money to shut it down.
And, if you live in CA, you also get to pay $500/year for the privilege of operating a "not CA" corporation in CA, not to mention some other reporting.
The "appears from nowhere" aspect is something of a problem, but it's valueless until transacted at which point the counterparty has the same obligation to know where it came from.
You could probably suceed in arguing that mining was creating the asset.
> literally impossible to comply right?
This has sadly not always been a defense, like jailing women for miscarriage.
It is impossible to report "who" you received an asset from if you received it from a smart contract that is not under the control of any one business or individual. In the cases of most defi contracts, the assets involved are pooled from many thousands of individuals and act as a sort of autonomous market maker.
Cases where criminals obfuscate simple transfers are already prosecuted under money laundering laws, and they are very easy to prosecute because blockchains are a completely open record for anyone to data-mine.
If research into and use of financial smart contracts should be shut down immediately in the US, let them debate and make a law about that. Don't sneak it into a monster bill and pretend that it's about something entirely different.