CoinCenter and other cryptocurrency advocacy groups have expressed strong criticism of a Senate bill known as the Crypto-Asset National Security Enhancement and Enforcement Act (CANSEE). This bill proposes imposing strict regulations on individuals involved in decentralized finance (DeFi), making platform operators and major stakeholders responsible for any illegal activities taking place on their platforms.
The bipartisan bill, introduced by Democratic senators Jack Reed and Mark Warner, as well as Republican senators Mike Rounds and Mitt Romney, has received backlash from CoinCenter and its executive director Jerry Brito. In a statement on July 20, CoinCenter described the bill as “messy, arbitrary, and unconstitutional.”
According to CoinCenter, the bill would expand sanctions penalties and Bank Secrecy Act (BSA) obligations to individual developers. It also raises concerns about granting the Secretary of the Treasury total authority in determining control over specific protocols. Despite proposed exemptions, CoinCenter argues that these do not adequately address the issue. Furthermore, the bill’s potential overreach could extend enforcement actions to individuals publishing books containing code.
While acknowledging the government’s desire to prosecute money laundering activities, CoinCenter criticizes the bill as a “blanket ban” that is unconstitutional and overly broad. The organization argues that the bill’s content-based approach could potentially restrict free speech.
The Blockchain Association, another prominent advocacy group, shared its response to the CANSEE bill on July 19. The association and its CEO, Kristin Smith, stated that illegal transactions represented only 0.24% of all crypto transactions in 2022. They argued that authorities already possess sufficient powers to enforce the law and deemed the bill “unworkable” and incompatible with digital asset technology. The Blockchain Association voiced support for other efforts, such as proposed amendments to a national defense bill that specifically target cryptocurrencies to prevent illegal activity.
Natalie Smolenski, a senior fellow for the BTC Policy Institute, expressed her disapproval of the bill on Twitter, stating, “They’re now trying to outlaw decentralization.”
The criticisms expressed by CoinCenter, the Blockchain Association, and other advocacy groups highlight concerns surrounding the CANSEE bill’s impact on DeFi and the potential infringement on individual rights and freedoms.
In conclusion, CoinCenter and various advocacy groups believe that the CANSEE bill goes too far in imposing regulations on DeFi and could have far-reaching implications for the cryptocurrency industry. They argue that the bill is arbitrary, unconstitutional, and potentially infringes upon free speech rights. As the bill faces scrutiny and opposition from these influential voices, its future remains uncertain.