Coinbase CEO Joins Industry Titans in Blasting Senate Democrats’ DeFi Crackdown Proposal
Regulatory storm clouds gather as Washington takes aim at decentralized finance.
The Pushback Heard Across Crypto
Coinbase's Brian Armstrong leads a chorus of industry heavyweights slamming proposed DeFi regulations that could reshape the digital asset landscape. Senate Democrats want tighter controls—crypto's biggest names say they're missing the point entirely.
Why This Fight Matters
This isn't just another policy debate—it's a fundamental clash over who controls the future of finance. The proposal would impose traditional banking rules on protocols that were built specifically to bypass them.
The Industry Fires Back
Multiple crypto executives have joined Armstrong in calling the legislation misguided. They argue the rules would stifle innovation while doing little to address actual risks. One anonymous VC put it bluntly: 'They're trying to put horseshoes on race cars.'
Meanwhile, traditional finance veterans watch from the sidelines—probably wondering why they didn't think of charging 2% for moving digits around first.
The battle lines are drawn. Whatever happens next could determine whether DeFi grows up or gets shut down.
Widespread Criticism from the Crypto Community
Besides Armstrong, the proposal has sparked a widespread backlash from industry leaders, including Blockchain Association CEO Summer Mersinger, who argue it effectively bans DeFi and wallet development in the U.S.
“The disappointing proposal outlined by Senate Democrats would effectively ban decentralized finance, wallet development, and other applications in the United States – an outcome that’s neither workable nor consistent with American innovation,” said Blockchain Association CEO Summer Mersinger, adding, “The language as written is impossible to comply with and would drive responsible development overseas. We urge our policymakers to stay at the table, continue to engage each other across the aisle, and ensure this critical piece of legislation supports – rather than hinders – our nation’s leadership in financial technology.”
Armstrong, quoting Mersinger’s statement, emphasized that the U.S. risks losing its tradition of technological leadership if the legislation passes in its current form. Despite the setback, he expressed commitment to engaging with Congress to refine the bill and protect economic freedom.
The controversy has stalled bipartisan crypto market structure talks, with critics like Uniswap founder Hayden Adams echoing concerns that the Democratic counterproposal could “kill DeFi” in the U.S.
The republican senate banking market structure draft is the best bill we’ve seen on defi / dev protection
Just read the leaked dem counter and it would kill defi in the US
There needs to be a HUGE shift from dem senators to fix this and make progress on market structure https://t.co/1Ilj2AJk4S
The timing coincides with heightened political tensions, as some speculate the move may be a strategic jab at the TRUMP administration amid its recent successes, including ending the Gaza war.
As the crypto community rallies against the proposal, the outcome of these negotiations could shape the future of DeFi globally. At this time, industry titans are vowing to fight for a regulatory framework that fosters innovation rather than suppression.
Also read: Bitcoin Cycle Poised to Extend Beyond 2026: Mike Alfred
