Renowned blockchain developer and creator of Cardano (ADA), Charles Hoskinson, shared his views on the recent regulatory actions against the cryptocurrency industry.
Specifically, the occasion for Hoskinson’s remarks was the introduction of an Illinois Senate bill called the “Digital Property Protection and Law Enforcement Act,” which has already been dubbed as “the most unworkable state law.”
It is worth recalling that Cardano (ADA) is a blockchain based on a Proof-of-Stake consensus mechanism and ADA is its native cryptocurrency. Ouroboros is Cardano’s PoS algorithm: consuming much less power than Proof-of-Work, it ensures decentralization and scalability in a sustainable way.
Anti-crypto conspiracy? The words of the creator of the Cardano blockchain
As anticipated, Hoskinson voiced his opinion on the stringent new cryptocurrency regulations by the Illinois Senate.
Specifically, when asked what the catalyst was for greater regulation of the cryptocurrency industry, the Cardano blockchain creator stated unequivocally that it was the collapse of FTX.
“The moment that happened, I knew the whole industry was having a really tough time.”
Hoskinson also agrees with Kraken exchange founder Jesse Powell‘s theory that regulators deliberately allowed harmful elements of the system, such as FTX or Three Arrows Capital, to grow and prosper.
According to Powell, such bad actors serve the regulators’ agenda by demonstrating the unreliability and danger of the cryptocurrency industry, so they can become huge. When they explode, they give an excuse to tighten regulation, he recapped.
Hoskinson also noted that this statement was beginning to sound plausible when fair warning was given for many companies that exploded months or years before recent events.
At the same time, readers were quick to remind the entrepreneur of his skeptical remarks about the conspiracy in the SEC case against Ripple, congratulating him for finally realizing what the reality was.
The new bill regarding crypto: what it says
Apparently, Illinois Senate Bill SB 1887 would eliminate blockchain node operators, miners, and validators, waste judicial resources, and confuse existing law in an effort to protect Illinois consumers.
First, it is noted that this bill is a surprising U-turn for a state that was previously pro-innovation. Instead, this is now perhaps “the most unworkable state law” related to crypto and blockchain ever.
A shift that many were quick to call “shocking,” as Drew Hinkes did on his Twitter profile. Specifically, the new law focuses on consumer protection, which is a fair and remarkably important factor.
However, the way it seeks to protect consumers is to require node operators, miners and validators to do impossible things, or things that create new criminal and civil liabilities for themselves on pain of fines and/or fees.
Indeed, the bill would allow a court, upon receipt of an order from the attorney general or state’s attorney, to order any blockchain transaction appropriate for digital property or the execution of a smart contract and require a blockchain network.
Thus, anyone who processes a blockchain transaction originated in this state at any time, after the effective date of this law, shall process a court-ordered blockchain transaction without the need for the private key for digital property or smart contract.
On the other hand, a blockchain operator who has mined, validated or otherwise participated in the processing of a blockchain transaction on the blockchain network that originated in this state after the effective date of this law shall be liable to this state for a violation of the subsection.
More news about Cardano: Djed algorithmic stablecoin launched on the blockchain
Since the collapse of the algorithmic stablecoin Terra (LUNA) in mid-2022, many crypto users have expressed aversion to this particular asset class.
Indeed, the market for algorithmic stablecoins fell tenfold from the all-time high reached before Terra’s failure. However, this has not stopped Cardano’s developers from launching the ecosystem’s overcollateralized stablecoin: Djed (DJED).
Available on Cardano’s mainnet, it is pegged to the US dollar and backed by Cardano’s native currency, ADA, and uses the SHEN token as its reserve currency.
According to the announcement, the new token, developed for over a year, recently successfully completed a security audit.
DJED is a product of Coti, a developer of DeFi (Decentralized Finance) Solutions on the Cardano blockchain, as a tool for new opportunities in DeFi and payment.
Among the latest updates to the Cardano network, Charles Hoskinson on 12 January reported that the ecosystem will expand through custom sidechains.
However, on 23 January, due to an anomaly, 50% of Cardano nodes disconnected and had to reboot, causing a network outage. This occurred only a week before the launch of the new algorithmic stablecoin.
In early 2023, Bloomberg reported that the risk assessment firm Moody’s Corporation is developing a scoring system for stablecoins, which will include an initial analysis for up to twenty digital assets.