Coinbase CEO Brian Armstrong has publicly criticized a controversial DeFi regulation proposal from Senate Democrats, warning that it would stifle innovation and prevent the United States from becoming a global crypto hub. In an October 2025 social media post, Armstrong stated the crypto industry "absolutely won’t accept" the plan, which is part of the Responsible Financial Innovation Act (RFIA) and has reportedly stalled bipartisan talks on crypto market structure legislation.
The six-page document, titled "Preventing illicit finance and regulatory arbitrage through decentralized finance platforms," proposes establishing a clear regulatory framework for DeFi by defining accountability, clarifying oversight, and preventing misuse for illicit activities. Key provisions include mandatory Know Your Customer (KYC) rules for non-custodial wallets, classifying DeFi developers as financial intermediaries, and granting the U.S. Treasury unchecked authority to blacklist protocols via a "restricted list."
Industry leaders echoed Armstrong's concerns. Jake Chervinsky, Chief Legal Officer at Variant, labeled the proposal "deeply unserious" and effectively a "crypto ban," citing unworkable aspects that could criminalize core development activities. Uniswap CEO Hayden Adams and the Blockchain Association also opposed the bill, warning it could force DeFi innovation offshore. Negotiations have stalled, with Republicans rejecting the draft as incoherent, and delays risk pushing the legislation into 2026, where it may lose momentum due to midterm elections.
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