Coinbase CEO Criticizes Senate Proposal on DeFi Regulations

Brian Armstrong, the CEO of Coinbase, has voiced strong opposition to a proposed Senate Democratic regulation that seeks to categorize decentralized finance (DeFi) front-ends as brokers. He describes the proposal as detrimental to U.S. innovation in the crypto sector, emphasizing the importance of collaboration with lawmakers to refine it. Other industry leaders have echoed his concerns, arguing that the framework could ultimately stifle development and drive innovation overseas.

Key Takeaways

Brian Armstrong criticizes the Senate proposal to regulate DeFi front-ends as brokers.
He views the proposal as a threat to U.S. innovation and its potential to become a global crypto capital.
Armstrong affirms Coinbase's willingness to work with lawmakers for a better outcome.
Other industry figures, including Summer Mersinger and Jake Chervinsky, also reject the proposal, suggesting it could effectively eliminate decentralized finance in the U.S.
The proposed framework requires companies profiting from DeFi front-ends to register with regulatory bodies.

Coinbase

Main Content

Coinbase CEO Brian Armstrong has strongly criticized a Senate Democratic proposal that would regulate decentralized finance (DeFi) front-ends as brokers. He called it a "bad proposal" that poses a risk to innovation in the U.S. cryptocurrency landscape. In a post on X, Armstrong stated, “We absolutely won’t accept this,” explaining that such regulations could hinder technological advancements and thwart efforts to establish the U.S. as the global hub for cryptocurrency.

Armstrong recognized that "legislating is a process" and expressed Coinbase's commitment to collaborating with lawmakers to refine the proposal. He believes that constructive engagement is essential to ensure the resulting regulations support innovation rather than stifle it.

“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.”
— Brian Armstrong (@brian_armstrong) October 10, 2025

The context of this proposal indicates that it has been circulated among Senate Democrats, outlining a potential regulatory framework for overseeing decentralized finance as part of a broader initiative on cryptocurrency market structure. According to reports from Politico, the proposal suggests that any entity or individual earning profits from a DeFi platform's front end—such as wallet interfaces and user-facing applications—would need to register with either the Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC) and operate as a licensed broker.

Armstrong's stance is supported by other voices in the industry who share his concerns. Summer Mersinger, CEO of the Blockchain Association and former CFTC commissioner, stated that the proposed regulation would essentially “effectively ban decentralized finance, wallet development, and other applications in the United States.” She stressed that the existing language makes compliance nearly impossible and would force responsible innovation to relocate abroad.

Moreover, Jake Chervinsky, chief legal officer at venture capital firm Variant, has echoed these sentiments on social media, asserting that the proposed measures are tantamount to a crypto ban.

“1/ Senate Democrats are trying to kill market structure. A group just sent a counter-proposal to the RFIA and it is deeply unserious. These Senators claim to be pro-crypto, but what they propose is basically a crypto ban. It's hard to imagine a good deal happening right now.”
— Jake Chervinsky (@jchervinsky) October 9, 2025

As discussions about cryptocurrency regulation continue, the need for a thoughtful approach that fosters innovation while ensuring consumer protection remains a pivotal concern among industry leaders.