A Bill to Tighten Rules on Decentralized Finance
A bipartisan group of senators has introduced a bill aimed at combating money laundering and sanctions evasion in the field of decentralized finance (DeFi). The bill, called the Crypto-Asset National Security Enhancement and Enforcement Act, seeks to strengthen the Treasury Department’s ability to enforce existing rules with DeFi projects. It also places liability on those who control DeFi projects if laws are violated and requires crypto ATM operators to verify user identities.
Key Points:
- The bill aims to tighten rules on money laundering and sanctions evasion in DeFi.
- It strengthens the Treasury Department’s enforcement powers.
- Those who control DeFi projects would be held liable if laws are violated.
- Crypto ATM operators would be required to verify user identities.
- Other bills addressing money laundering in digital assets have been introduced.
DeFi Advocates Push Back
Some DeFi advocates have criticized the bill, claiming that it would effectively ban DeFi development in the country. They argue that it is a disproportionate response to the illicit use of DeFi and risks undermining law enforcement’s existing insight and reach into peer-to-peer crypto activity. The bill has also been called arbitrary and ill-defined, as it applies rules on traditional financial firms to anyone who controls a DeFi protocol or develops an application to use the protocol.
Hot Take
The introduction of this bill reflects growing concerns about money laundering and sanctions evasion in the crypto space. While it aims to strengthen regulations and enforcement, it has faced criticism from DeFi advocates who argue that it goes too far and could stifle innovation. Finding the right balance between regulation and fostering innovation will be crucial as the crypto industry continues to evolve.
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