Senate Democrats’ Crypto Proposal Sparks Industry Backlash

Progress on a major U.S. crypto framework bill has stalled as Senate Democrats introduced a counterproposal that has drawn sharp criticism from the blockchain industry. The Responsible Financial Innovation Act (RFIA), designed to provide regulatory clarity for cryptocurrencies and decentralized finance (DeFi), now faces partisan gridlock.

Reports indicate the Democratic amendments include a 'restricted list' targeting DeFi platforms deemed high-risk, granting the U.S. Treasury broad oversight powers. Industry leaders warn this approach could cripple innovation, push development overseas, and compromise the decentralized ethos of blockchain technology.

'This isn’t regulation—it’s a government takeover,' said Variant’s Jake Chervinsky. The Blockchain Association echoed concerns, calling the plan 'effectively a ban' on DeFi in America. With RFIA negotiations paused, the path forward remains uncertain as stakeholders brace for potential seismic shifts in the regulatory landscape.