Coinbase CEO Brian Armstrong denounced a Senate Democratic proposal that would regulate DeFi front-ends as brokers, calling it a “bad proposal” that threatens U.S. crypto innovation.
Summary
- Coinbase CEO Brian Armstrong criticized a Senate Democratic proposal to regulate DeFi front ends as brokers, saying it would hinder U.S. crypto innovation.
- Other cryptocurrency advocates echoed these concerns, warning that the plan could effectively ban the development of DeFi in the US
“We absolutely will not accept this,” Armstrong said in a statement message on Xwarning that the proposal would stifle innovation and prevent the US from becoming the crypto capital of the world. However, he acknowledged that “legislation is a process” and said Coinbase is committed to working with lawmakers to “get it right.”
For context, the proposed framework, which has reportedly been circulated among Senate Democrats, outlines how regulators could oversee decentralized finance as part of broader legislation on the structure of the crypto market.
According to reporting from Politico, the document suggests that any company or individual profiting from the front end of a DeFi platform (for example, wallet interfaces and user-facing apps) would be required to register with the Securities and Exchange Commission or the Commodity Futures Trading Commission and operate as a licensed broker.
Armstrong is not alone in his criticism. 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.”
“The language as written is impossible to comply with and would encourage responsible development abroad,” Mersinger said in a statement. She urged policymakers to continue talks between the two sides and not hinder technological progress.
Jake Chervinsky, chief legal officer at venture capital firm Variant, echoed the sentiment on X: proverb that regulators were actually proposing a crypto ban.
