U.S. Senate decides to regulate the DeFi sphere by banking standards
The US Senate plans to pass legislation to regulate the field of decentralized financial protocols (DeFi) as banks
The bill targets "those who control" decentralized applications or provide access to them
The U.S. Senate plans to pass a new law to close another gap in cryptocurrency regulation that would impose strict anti-money laundering requirements on the decentralized finance (DeFi) sphere, Coindesk reports.
The law stipulates that DeFi protocols will apply banking control standards to their user base. The document aims to "combat the rise of cryptocurrency-based crime," which plays a major role in national security, the Senate emphasizes.
Decentralized services work on the basis of software smart contracts and after launch can exist without the participation of developers due to the distributed structure of blockchains. At the same time, the bill targets "those who control" decentralized applications or provide access to them, for example, through websites or other public interfaces.
"If no one controls the DeFi protocol, then (as a backstop measure) anyone who invests more than $25 million in its development will be held accountable for the commitments made," the briefing document said.
Controlling organizations, according to the Senate plans, would be required to collect and verify information on their clients, support anti-money laundering programs, report suspicious activity to the government, and block sanctioned individuals from using DeFi.
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