CoinCenter, other advocacy groups condemn CANSEE bill for overreach on DeFi

CoinCenter and other crypto advocacy groups have criticized a Senate bill that would impose strict regulations on individuals involved in decentralized finance (DeFi).

The bill in question is titled the Crypto-Asset National Security Enhancement and Enforcement Act (CANSEE). If put into law, it would make DeFi platform operators and major stakeholders responsible for illegal uses of their platforms.

That bipartisan bill was introduced on July 19 by Democratic senators Jack Reed and Mark Warner and Republican senators Mike Rounds and Mitt Romney.

Now, CoinCenter and its executive director Jerry Brito have criticized the proposal as “messy, arbitrary, and unconstitutional” in a July 20 statement.

CoinCenter warned that the bill would extend sanctions penalties and Bank Secrecy Act (BSA) obligations to individual developers. It added that the Secretary of the Treasury would have total authority in deciding who has control over any given protocol and said that proposed exemptions do not solve this issue. It also described potential overreach, such as possible enforcement against those who publish books containing code.

CoinCenter acknowledged the government’s desire to prosecute individuals involved in money laundering but otherwise described the bill as a “blanket ban,” “unconstitutional,” and “overbroad” due to a content-based approach that arguably restricts free speech.

Other groups have also commented

The Blockchain Association, meanwhile, published its own response to the CANSEE bill on July 19. The advocacy group and its CEO, Kristin Smith, asserted that illegal transactions represented just 0.24% of all crypto transactions in 2022 and argued that authorities have enough powers to enforce the law at present.

The group otherwise called the bill “unworkable” and “simply incompatible with digital asset technology.” It said that it supports other efforts that could prevent illegal activity — including amendments to a national defense bill that would specifically target crypto.

Elsewhere, Natalie Smolenski, senior fellow for the BTC Policy Institute, has stated: “They’re now trying to outlaw decentralization.”

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