US Crypto Bill Faces Criticism

US Congress has been reviewing a crypto bill that also focusses on decentralized finance (DeFi). Amongst the crypto community, the bill has been termed a “DeFi killing” and has been the subject matter of huge debate.

Most recently the bill was heavily criticized by Nic Carter who co-founded Coin Metrics and the founding partner of Castle Island Ventures.

He commented that the bill aims at ‘DeFi killing’ which is why it is likely to fail upon arrival because of ill-founded intention. Carter remarked, Congress is engaged in a ‘futile exercise’ of reviewing a worthless piece of paper.

FTX-backed Crypto Bill

Responding to a political thread on the proposed bill, Carter commented that the bill is backed by a crypto exchange that is on the brink of collapse.

He was referring to FTX.com which is facing turmoil caused by financial hardships and the firm has reportedly filed for bankruptcy.

A few days ago, the founder of FTX, Sam Bankman-Fried, was seen supporting the bill and in particular the contents and wording of it.

According to FTX’s founder, the draft bill would encourage DeFi-based projects in obtaining registrations as well as licenses to operate.

Vanishing of Lobbyists

Responding to Bankman-Fried’s, Carter said that FTX was supporting the bill because lobbyists behind FTX were trying to create a passage for the bill. However, FTX is on the brink of collapse, hence, lobbyists have vanished.

Earlier, Carter had said that Republicans would acquire a majority in the House which would be in the interest of the crypto industry.

Mid-Term Election Results

The results of the mid-term Senate elections now show that the House has been taken over by Republicans, after a close competition.

Carter is hoping that since the Republicans are ‘pro-crypto’, they will amend the bill in the best interest of the crypto industry.

He believes that initial coin offers (ICOs) shall be exempted from the Securities & Exchange Commission’s classifications. On the other hand, Congress is expected to consider the long-pending issue of Central Bank Digital Currency.

Background of the Proposed Bill

There emerged a rumor in October 2022 that a crypto bill was secretly being reviewed by the US Senate.

The bill was reportedly called the “Digital Commodities Consumer Protection Act” which was supposed to outline a roadmap on how to regulate the digital industry.

As the name of the bill suggests, the digital industry was to be regulated by the Commodities Future Trading Commission. However, a copy of the bill was somehow leaked and thereafter published in the electronic and print media.

Initial rumors regarding the bill suggested that DeFi shall be completely banned in the US. Countrywide criticism then erupted which led the proposers of the bill to revise the bill so as to remove the DeFi ban idea.