TechFlow news, October 10 — According to Cointelegraph, Democratic members of the U.S. Senate Banking Committee introduced a counter-proposal for crypto regulation on Thursday, suggesting authorizing the Treasury Department to place decentralized finance (DeFi) protocols deemed excessively risky on a "restricted list," with using such protocols becoming a criminal offense. The proposal also calls for implementing KYC rules on crypto application front-ends (including non-custodial wallets) and weakening legal protections for crypto developers.
Crypto lawyer Jake Chervinsky criticized the proposal as "not regulating crypto but banning it," warning it could undermine bipartisan support achieved by the CLARITY Act, which previously passed the House by a 294-134 vote. Zunera Mazhar, Vice President of the Chamber of Digital Commerce, said such harsh measures would drive innovation overseas rather than addressing actual risks.
The proposal stands in sharp contrast to the draft Responsible Financial Innovation Act (RFIA), which enjoys bipartisan backing and aims to provide greater protection for crypto developers and reduce excessive SEC regulation.
