Coinbase CEO Rejects Senate’s New DeFi Proposal

Coinbase Criticizes October’s Senate DeFi Proposal

Brian Armstrong, Coinbase CEO, has opposed the Senate’s DeFi regulatory proposal unveiled in October. The proposal has drawn criticism for potentially hindering crypto innovations in the United States.

Industry leaders including Armstrong have pointed out that the proposal would disrupt DeFi and innovate through forbidding U.S.-based DeFi activities. It has spurred collective opposition from prominent crypto figures.

DeFi Could Exit U.S. Under New Regulations

The proposed regulation could shift DeFi activities out of the U.S., as major players argue compliance is impossible. This would stop potential growth and development in the domestic crypto sector.

Brian Armstrong, alongside other crypto leaders, suggests that the proposal will drive away development from the U.S. and hinder its position as a crypto capital, which may affect thousands of jobs and investments. As Armstrong stated,

“We absolutely won’t accept this. It’s a bad proposal, plain and simple, that would set innovation back, and prevent the US from becoming the crypto capital of the world. But legislating is a process, and we’re committed to engaging and helping Congress get it right.”

U.S. History of DeFi Regulation Efforts

This proposal aligns with previous U.S. efforts to impose traditional financial regulations on decentralized protocols. Past regulatory attempts led projects to restrict U.S. users or relocate abroad.

Experts expect the regulation’s progression may result in significant liquidity migration and innovation abroad, similar to past shifts observed with earlier regulatory proposals. Crypto leaders argue for lobbying and negotiation efforts.