Senate Democrats’ DeFi Proposal Sparks Industry Backlash, Halts Talks
The recent proposal from Senate Democrats has caused significant controversy within the DeFi industry, leading to halted bipartisan talks on a comprehensive crypto market structure bill.
- The proposal suggests KYC requirements for non-custodial wallets and classifies developers as financial intermediaries, potentially banning DeFi in the US.
- Coinbase CEO Brian Armstrong criticized the proposal, stating it would hinder US innovation and pledged continued engagement with Congress.
- Industry leaders like Jake Chervinsky and Summer Mersinger argue that the proposal could force US DeFi development offshore.
Bipartisan Negotiations Stalled
- Senate Banking Committee Republicans have paused discussions until Democrats agree to a markup session, citing incoherent policy ideas in the proposal.
- Accusations of leaking private communications have further escalated tensions between parties.
This deadlock in the Senate is notable against the backdrop of the House of Representatives' progress, which passed the CLARITY Act with strong bipartisan support. The ongoing disputes highlight the challenges in US crypto regulation, despite growing state-level adoption.