A leaked U.S. Senate draft proposal targeting decentralized finance (DeFi) has sparked major backlash across the crypto industry. The draft requires all parties earning revenue from DeFi platforms to obtain broker licenses.
Reportedly prepared by Senate Democrats, the proposal directly targets DeFi operations. According to the six-page document published by Politico, any entity providing front-end services or generating revenue from DeFi must register with the Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC) as a broker. The U.S. Treasury would also have the authority to classify “high-risk” DeFi protocols and place them on a restricted list.
If enacted, the measure could make it nearly impossible for leading DeFi platforms such as Uniswap, Aave, Lido, Curve, Balancer, and SushiSwap to operate in the U.S. Industry leaders warn that the law could also negatively affect Ethereum-linked altcoins.
Blockchain Association CEO Summer Mersinger said the proposal would “effectively ban DeFi and related applications.” Digital Chamber Vice President Zunera Mazhar added, “Good policy doesn’t punish decentralization — it protects consumers and encourages innovation.” Experts warn that if the bill passes, it could severely damage the U.S.’s ambition to remain a global crypto hub.
