A leaked draft from the US Senate Banking Committee Democrats outlines an aggressive approach to decentralized finance (DeFi), proposing that any person or firm “designing, deploying, operating or profiting from a DeFi front-end” be regulated as a broker and register with the SEC or CFTC.

The text would also extend KYC/AML obligations to DeFi interfaces, including some non-custodial wallets and UI hosts, and authorize the U.S. Treasury to maintain a “restricted list” of risky protocols and front-ends.

While the memo carves out room for “sufficiently decentralized” protocols that don’t monetize, and shields open-source developers who don’t profit from running the tech, critics argue the compliance bar is functionally impossible for most U.S.-based teams.

Industry Backlash And Early Marke

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