Democratic Party senators propose ‘list of restrictions’ for DeFi protocols. According to many, this could “destroy DeFi” or cause the industry to move from the US to other countries.
The Democratic Party is trying to destroy the DeFi industry
Despite previous support for the Cryptocurrency Market Structure Act, several U.S. Democratic senators have introduced a counterproposal that, if passed and signed by the president, could result in decentralized finance protocols being placed on the “restriction list.” It’s about a project that is deemed too risky. In practice, this could “destroy DeFi” or cause the industry to move to other countries.
A lawyer specializing in cryptocurrencies, Jake Chervinsky, claims that the Democratic Party’s idea could destroy any chance of establishing a cryptocurrency market framework, i.e. destroying what they were trying to build with the CLARITY Act, which was passed in the House of Representatives in July (it was adopted by a vote of 294 to 134).
This is terrible. It does not regulate cryptocurrencies, in fact it bans them
– warns Chervinsky, pointing to the suggested creation of a “restricted list” of DeFi protocols, which would be a kind of technological censorship.
In practice, changes in the law would even mean that any US citizen who uses these protocols and generates “recurring revenue” from them could be punished, warns the president of MetaLeX Labs, Gabriel Shapiro.
The idea was proposed by: Mark Warner, Ruben Gallego, Andy Kim, Reverend Raphael Warnock, Angela Alsobrooks and Lisa Blunt Rochester.
It’s about politics
Cryptocurrencies have become a political issue in the US. Donald Trump supported the idea of supporting digital assets during the election campaign. Kamala Harris has barely talked about this topic at all. Since then, one gets the impression that Democrats are averse to cryptocurrencies. Not in a particularly substantive way – it simply resembles the actions of politicians in Poland: if PiS supports something, KO must criticize it and vice versa.
But Trump’s support for the industry leaves Democrats vulnerable: he can veto any bill they propose. Moreover, his Republican Party has a majority in Congress, so the ideas of its rivals are doomed to failure.
