TechFlow news, according to Cointelegraph, on September 10, the U.S. Congress held its first-ever hearing on decentralized finance (DeFi), where lawmakers from the Republican and Democratic parties displayed clear divisions on the issue. Hosted by the House Committee on Financial Services, the hearing was themed "Decoding DeFi: Unpacking the Future of Decentralized Finance," aiming to explore emerging topics such as tokenization and blockchain applications in finance.
Democratic Representative Brad Sherman expressed strong criticism, stating that DeFi is primarily used for crime, evading sanctions, and tax avoidance. He bluntly remarked, "The effort here is to liberate billionaires from income taxes." Peter Van Valkenburgh, research director at Coin Center, countered that regulators have failed to provide sufficient compliance guidance for the crypto industry. He emphasized, "The existence of tax evasion does not justify a financial system that is 100% monitored and controlled."
Democratic Representative Maxine Waters referenced the hacking of Laura and Tiffany Trump's X accounts, which were exploited to promote fraudulent tokens linked to the Trump family’s DeFi project, "World Liberty Financial." She questioned whether regulatory agencies like the SEC and CFTC are equipped to address DeFi platforms and "the widespread noncompliance of entities claiming decentralization to evade regulation."
In contrast, Amanda Tuminelli, chief legal officer of the DeFi Education Fund, highlighted DeFi’s openness and inclusivity: "Traditional finance relies on intermediaries that often act as gatekeepers. Large banks can deny access for discriminatory reasons or without cause. But DeFi offers open access—anyone with an internet connection can access DeFi protocols, serving as a model of financial inclusion."
The two-and-a-half-hour hearing underscored deep divisions among U.S. lawmakers regarding DeFi technology, while also reflecting the challenges facing regulators. Crypto lawyer Jake Chervinsky commented on social media: "A few years ago, DeFi had only ten projects, and no one thought it would amount to anything. Now it's getting a full showcase in the halls of power in Washington."
