Coinbase CEO Criticizes Senate Democrats’ DeFi Proposal
Coinbase CEO Brian Armstrong has strongly opposed a leaked Senate Democrats’ proposal targeting decentralized finance (DeFi). He called it a “bad proposal” that could harm U.S. leadership in the crypto industry.
The proposal includes strict rules. It suggests a Treasury-managed restricted list for high-risk DeFi protocols. It also requires Know Your Customer (KYC) checks for non-custodial wallets. Armstrong warned on X that these rules might stifle innovation and push development overseas.
Industry Leaders Voice Strong Opposition
The proposal has drawn broad criticism from crypto leaders. Blockchain Association CEO Summer Mersinger said it would effectively ban DeFi and wallet development in the U.S.
- “The proposal would ban decentralized finance, wallet development, and other applications in the U.S.,” Mersinger said.
- She added the rules are “impossible to comply with” and would drive development abroad.
- Mersinger urged lawmakers to work together to create legislation that supports U.S. leadership in financial technology.
Armstrong echoed these concerns. He warned the U.S. risks losing its technological edge if the bill passes as is. Despite this, he pledged to work with Congress to improve the legislation and protect economic freedom.
DeFi Future at Stake Amid Political Tensions
The proposal has stalled bipartisan talks on crypto market structure. Uniswap founder Hayden Adams said the Democratic counterproposal could “kill DeFi” in the U.S.
Some see the timing as a political move amid tensions with the Trump administration. The crypto community is rallying against the proposal. Industry leaders vow to fight for regulations that encourage innovation, not suppression.
