The Democratic DeFi regulation proposal in the US Senate has been criticized by Republicans and the crypto industry

A six-page proposal by Democrats in the US Senate aimed at preventing the illegal activities of decentralized finance (DeFi) has sparked strong criticism from Republican lawmakers and the crypto industry. The proposal would require regulators such as the Treasury Department to determine "whether the protocol is sufficiently decentralized" and treat individuals or entities that design, deploy or operate DeFi front-end services as intermediaries. Crypto industry insiders have warned that the proposal would almost amount to a ban on DeFi and wallet development and could force related development to be moved overseas. A spokesperson for the Republican committee said that the Democrats have not yet committed to a debate time for the proposal, the content of the document is unwritten and the policy ideas are confusing, making it difficult to promote market structure legislation. Experts pointed out that the final Senate bill needs to have partial Democratic support and be coordinated with the House version.