Today in Crypto: DeFi Restrictions Spark Backlash, Roger Ver Strikes Deal, and Luxembourg Enters Bitcoin ETF Market

 In today’s crypto landscape, Democratic Senators are facing criticism for introducing a proposal that could severely impact the decentralized finance (DeFi) ecosystem. Meanwhile, Roger Ver — often dubbed “Bitcoin Jesus” — has reportedly reached a settlement with the U.S. Justice Department to avoid prison time over tax-related charges. In another major development, Luxembourg’s sovereign wealth fund has made its first-ever investment in a Bitcoin ETF, marking a significant step for European institutional adoption.



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⚖️ Democrats Face Criticism Over Proposed DeFi ‘Restricted List’


A group of Democratic Senators has reportedly suggested new regulations that could place certain DeFi protocols on a government-controlled “restricted list” if deemed too risky — a move that many industry leaders warn could effectively “kill DeFi.”


The proposal, shared with the Senate Banking Committee on Thursday, aims to enforce Know Your Customer (KYC) rules on the frontends of crypto applications, including non-custodial wallets. It would also remove certain legal protections currently available to crypto developers, according to a report by Punchbowl News.


Crypto lawyer Jake Chervinsky strongly criticized the counter-proposal, saying it would destroy any progress toward establishing a unified crypto market structure framework. He noted that it could undermine the bipartisan momentum achieved by the CLARITY Act, which passed the House in July with strong support (294–134).


> “It doesn’t regulate crypto — it bans it,” said Chervinsky, referring to the suggested measure that would allow the U.S. Treasury Department to label DeFi platforms as “too risky,” making their use a criminal offense.





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💬 Industry Voices Warn of Major Setback


Summer Mersinger, CEO of the Blockchain Association, echoed similar concerns. She warned that the proposal, if approved, would make regulatory compliance nearly impossible for U.S.-based crypto firms. As a result, it could push innovators and developers overseas, stifling the country’s competitiveness in the global blockchain space.


Critics say that instead of supporting innovation and security, such restrictive policies could drive DeFi projects out of the U.S., leaving the country behind in the rapidly evolving world of decentralized finance.



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🌍 Broader Crypto Updates


Roger Ver Settlement: Reports suggest Ver has reached a deal with the U.S. Department of Justice to resolve tax-related issues, potentially avoiding jail time.


Luxembourg’s Bitcoin ETF Move: The nation’s sovereign wealth fund has taken its first step into Bitcoin exposure by investing in a Bitcoin ETF — signaling growing European confidence in digital assets.




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🧭 Final Thoughts


As global crypto adoption grows, the debate between innovation and regulation continues to heat up. While governments seek greater oversight, many experts argue that overly strict measures could push technological progress out of reach.


The next few months could prove pivotal for DeFi’s future — not just in the U.S., but worldwide.

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