Coinbase CEO Criticizes Senate Democrats’ Proposal to Regulate DeFi Frontends
Coinbase CEO Brian Armstrong has spoken out against a proposal from Senate Democrats that would regulate DeFi frontends as brokers, calling it a “bad proposal” that threatens crypto innovation in the US. The proposal, which has been circulated among Senate Democrats, aims to oversee decentralized finance as part of broader legislation on crypto market structure.
Concerns Over Regulatory Framework
The proposed framework outlines how regulators could oversee decentralized finance, requiring companies or individuals that benefit from the front end of a DeFi platform to register with the Securities and Exchange Commission or the Commodity Futures Trading Commission and act as a licensed broker. Armstrong has expressed strong opposition to this plan, stating that it would hinder innovation and prevent the US from becoming the crypto capital of the world.
“We will absolutely not accept this,” Armstrong said in a post on X, warning that the proposal would hinder innovation and prevent the US from becoming the crypto capital of the world. However, he acknowledged that “legislation is a process” and said that Coinbase is committed to working with lawmakers to “get it right.”
Industry Experts Share Concerns
Other crypto advocates have shared Armstrong’s concerns, warning that the plan could effectively ban DeFi development in the US. Summer Mersinger, CEO of the Blockchain Association and former CFTC commissioner, said the proposal would “effectively ban decentralized finance, wallet development and other applications in the United States.” Jake Chervinsky, chief legal officer at venture firm Variant, echoed these sentiments, saying regulators were effectively proposing a crypto ban.
According to reports from Politico, the document proposes that any company or individual that benefits from the front end of a DeFi platform (e.g. wallet interfaces and user-facing apps) should be required to register with the Securities and Exchange Commission or the Commodity Futures Trading Commission and act as a licensed broker. This has raised concerns among industry experts, who argue that the proposal is overly broad and would stifle innovation in the US crypto market.
Call to Action
Armstrong and other industry experts are urging policymakers to reconsider the proposal and work towards a more balanced regulatory framework that promotes innovation and growth in the US crypto market. As the debate over crypto regulation continues, it remains to be seen how lawmakers will respond to these concerns and shape the future of the industry.
For more information on this developing story, visit https://crypto.news/coinbase-ceo-blasts-senate-plan-on-defi/
