Senate Democrats’ Proposal Could Restrict DeFi, Say Industry Insiders
The U.S. Senate is considering a proposal to regulate decentralized finance (DeFi) as part of a broader effort to oversee the crypto industry.
- The plan suggests that firms or individuals managing customer needs in DeFi should register with the SEC or CFTC and be regulated as brokers.
- Regulation might broadly encompass "everyone in crypto," according to Jake Chervinsky of Variant.
- Critics argue the proposal could hinder DeFi development, potentially pushing innovation overseas.
- The language aims to allow government agencies to target those accountable for DeFi activities while exempting non-profit DeFi protocols.
- Software developers might avoid legal liability if they don't profit from their open-source technologies.
House lawmakers prefer using their existing Digital Asset Market Clarity Act as a framework instead of starting anew. However, Senate legislation requires bipartisan support, with Democrats seeking changes to previous drafts before proceeding.