Overview

• Democratic staff language would require anyone designing, deploying, operating or profiting from a DeFi front-end to register as a broker with the SEC or CFTC.
• The text extends KYC/AML obligations to certain non-custodial wallets and empowers Treasury to keep a restricted list of protocols and front-ends deemed risky.
• Coinbase CEO Brian Armstrong called the proposal "bad, plain and simple" and vowed to keep engaging Congress, while industry groups warned it would effectively ban DeFi in the U.S. Senate Banking Committee Republican staff paused meetings after the leak, with aides calling the document not a good‑faith offer as Democratic and Republican offices traded blame for the breakdown.
• A market gauge of DeFi tokens slipped roughly 3–4% following the leak, and reporting notes limited carve‑outs for non‑monetized, sufficiently decentralized protocols that critics say are impractical for most teams.