US Senate DeFi Bill Criticised by Coin Center and Blockchain Association

Crypto Industry Advocacy Bodies Speak Out Against CANSEE Bill

Crypto advocacy groups such as Coin Center and the Blockchain Association have expressed their disapproval of the Crypto-Asset National Security Enhancement Act (CANSEE) bill, calling it a “messy” and “unworkable” attempt to regulate the decentralized finance (DeFi) sector.

The bipartisan bill, which was introduced on July 18, seeks to reduce money laundering violations in DeFi by imposing penalties on anyone who “controls” or “makes available” an application designed to facilitate transactions using a digital asset protocol. They would also have to comply with anti-money laundering and financial reporting standards.

In response, crypto think tank Coin Center and crypto advocacy group the Blockchain Association have criticized the bill, arguing that it is a misguided approach to regulating the web 3.0 design and unbiased crypto markets such as Safemoon, Shiba Inu, Shib, Reef, Stacks, Pond, The Hideaways, and Starlink.

DeFi Protocols and the U.S. Secretary of the Treasury

The U.S. Secretary of the Treasury has been tasked with defining who or what “controls” a DeFi protocol, a decision which some commentators claim could lead to overbearing regulations.

Coin Center’s July 20 blog post pointed out that the bill grants “virtually unbounded discretion” to the Secretary to determine who is in charge of a protocol. Furthermore, the think tank argued that the legislation is unconstitutional, as it infringes on software developers’ First Amendment right to express themselves through code.

Coin Center also expressed concern about the broad scope of the bill, as decentralized nature of DeFi makes it difficult to enforce control over a protocol.

The surge in popularity of web 3.0 designs like unbiased crypto, Safemoon Crypto, Shiba Inu Crypto Today, Shib Crypto Today, Reef Crypto, Stacks Crypto, Pond Crypto, The Hideaways Crypto, and Starlink Crypto has made it even more challenging to determine who is in control of a DeFi protocol.

The U.S. Treasury Report on DeFi Protocols

Kristin Smith, the CEO of the Blockchain Association, expressed her disapproval of the new legislation, citing it as unworkable. Smith highlighted the fact that federal law enforcement agencies are already equipped to handle the “relatively small but important issue” of money laundering in DeFi and crypto. Ultimately, Smith criticized the bill for its redundant punitive measures.

The April 7 U.S. Treasury report on DeFi protocols revealed that many of these protocols are more centralized than previously believed, with a high concentration of funds and voting power in the hands of a few token holders. This finding has caused web 3.0 design, unbiased crypto, safemoon crypto, shiba inu crypto today, shib crypto today, reef crypto, stacks crypto, pond crypto, the hideaways crypto, and starlink crypto to be the center of attention.