It is part of the cryptocurrency market structure bill.
“It is basically a ban on cryptocurrencies,” said lawyer Chervinsky.
Under the framework of negotiations in the United States on the “cryptocurrency market structure” bill, Democratic senators proposed including regulations for decentralized finance (DeFi), according to a document sent to Republicans that was leaked to the industry.
According to him documentanyone who designs, implements, operates or benefits from a DeFi interface that facilitates trading, custody, settlement, lending, among other activities, is a digital asset intermediary. And it presents that the Treasury, in coordination with the SEC, the CFTC and the Federal Reserve, must designate which parties exercise control or influence over a decentralized finance platform.
Under the proposal, the SEC would establish rules for how dealer requirements apply to front-ends that provide access to securities, and the CFTC would issue parallel rules that apply the requirements of its dealer framework to front-ends that provide access to digital commodities or derivatives.
On the other hand, he maintains that the Treasury will determine if a protocol is sufficiently decentralized. It clarifies in this regard that writing or publishing open code does not constitute a violation, unless there is implementation, control or benefit of the protocol.
“Protocols that meet the decentralization criteria are not intermediaries, unless there are front-ends with a presence in the United States or recurring income,” he details.
In this sense, the regulatory proposal that the Treasury may include DeFi protocols or front-ends on a “restricted list”. Likewise, it proposes that it should publish an annual report that evaluates the risks related to DeFi.
The approach seeks to “establish a clear regulatory framework for decentralized financial platforms by defining accountability, clarifying oversight, and preventing misuse of decentralized protocols for illicit financing, evasion of sanctions, or circumvention of market security barriers.”
The initiative has drawn criticism among DeFi enthusiasts. Specialist attorney, Jake Chervinsky, sentenced that “Senate Democrats are trying to kill the market structure.” “They claim to be pro-cryptocurrencies, but what they are proposing is basically a ban on cryptocurrencies,” he added.
«The disappointing proposal presented by Senate Democrats would effectively ban decentralized finance, the development of electronic wallets and other applications in the United States, an outcome that is neither viable nor consistent with American innovation. “The language as written is impossible to comply with and would drive responsible development abroad.”
Summer Mersinger, CEO of the Blockchain Association.
From Asociación Blockchain, a non-profit organization that promotes the cryptocurrency industry, They urged legislators to stay at the negotiating table and ensure that the bill, which they see as critical, supports and does not hinder U.S. leadership in financial technology.
«Good policy does not punish decentralization. “It protects consumers, preserves innovation and combats illicit finance where it really happens,” commentedIn parallel, Zunera Mazhar, director of the association that promotes the ecosystem, The Digital Chamber. In his opinion, the proposal “is clumsy, ineffective and runs the risk of pushing innovation abroad instead of addressing real risks.”
This context may generate setbacks in reaching bipartisan approval of the cryptocurrency market structure project, a law intended to define rules for the operation of digital assets and which, as CriptoNoticias reported, President Donald Trump hopes to sign this year.