Coinbase CEO Slams Senate DeFi Regulation as Threat to U.S. Crypto Innovation

today / 03:29

Coinbase CEO Brian Armstrong has publicly criticized a new U.S. Senate proposal aimed at regulating decentralized finance (DeFi) front-ends as brokers, warning that it poses a significant threat to crypto innovation in the United States.

The proposal, circulated among Senate Democrats in October 2025, suggests that any entity profiting from a DeFi platform's user-facing interface, such as wallet apps, must register with the SEC or CFTC and operate as a licensed broker. Armstrong denounced this as a "bad proposal" that could set back U.S. crypto innovation, drive DeFi activity and capital abroad, and hinder the country's position as a global crypto leader.

In a post on X (formerly Twitter) on October 10, 2025, Armstrong stated, "We absolutely won’t accept this. It’s a bad proposal, plain and simple, that would set innovation back, and prevent the US from becoming the crypto capital of the world. But legislating is a process, and we’re committed to engaging and helping Congress get it right."

Other industry leaders echoed these concerns. Summer Mersinger, CEO of the Blockchain Association and former CFTC commissioner, said the proposal would "effectively ban decentralized finance, wallet development and other applications in the United States" and is "impossible to comply with," potentially driving responsible development overseas. Jake Chervinsky, chief legal officer at Variant, described it as a "crypto ban" and expressed doubts about favorable outcomes from current negotiations.

The backlash underscores fears of economic impacts, including capital migration, reduced innovation, and job losses in the U.S. crypto sector, with historical parallels to past regulatory efforts that led projects to restrict U.S. users or relocate abroad.

Sources
Coinbase CEO Opposes Senate’s Anti-DeFi Proposal
theccpress.com 11.10.2025 05:38
Coinbase CEO Rejects Senate’s New DeFi Proposal
bitcoininfonews.com 11.10.2025 03:13
Coinbase CEO blasts senate plan on DeFi
crypto.news 10.10.2025 12:18