Leaked Draft of US Congress’ ‘DeFi Killer’ Bill Sparks Debate

Web3 startup accelerator Alliance DAO said the bill forces projects to sacrifice decentralization

article-image

US Capitol Building | Credit: Shutterstock

share
  • Draft shows modifications to language that drew criticism for being incompatible with DeFi
  • Sam Bankman-Fried said the bill will provide customer protection without jeopardizing DeFi

Details around Bitcoin and Ethereum regulation have been “circulating secretly” in Washington, DC. Now, a copy of draft language for the Digital Commodities Consumer Protection Act (DCCPA), a bill in the US Congress, was uploaded to GitHub by crypto attorney Gabriel Shapiro. Views on the potential impact on decentralized finance (DeFi) are mixed.

The latest draft appears to cushion language perceived to be detrimental to DeFi — a category of blockchain-based solutions that aim to improve finance by replacing central intermediaries with software code.

It lays out what constitutes digital commodities, brokers, custodians, dealers and platforms. Also included in the document are rules and the core principles that apply to players in the digital commodities sphere.

Shapiro noted that the draft excludes people who develop or publish software from the term “digital commodity trading facility” — a move he said could be beneficial to the crypto industry by protecting software engineers. 

Loading Tweet..

But he expressed doubt over the origin of this exclusion, calling for other commentators to review the draft and voice their opinions. The attorney, general counsel at Delphi Labs, said he shared the draft in the interest of “transparency and open discussion of the future of cryptolaw.”

The bipartisan bill was introduced by Sens. Debbie Stabenow (D-MI) and John Boozman (R-AR) in August. Their legislation clarifies that bitcoin and ether are to be classified as commodities, as opposed to securities that come under the ambit of the Securities and Exchange Commission — implying that the Commodity Futures Trading Commission (CFTC) would have exclusive jurisdiction over them.

After the introduction of the bill, The Washington Post reported Boozman said in a press call that the crypto industry “almost universally” prefers to be regulated by the CFTC.

Sam Bankman-Fried believes draft bill won’t kill DeFi

FTX CEO Sam Bankman-Fried has expressed support for the framework, saying he was excited to see a “strong bill” that addresses customer protection in crypto. 

On Wednesday, the crypto billionaire tweeted that he was optimistic the Stabenow-Boozman bill would not jeopardize “the existence of software, blockchains, validators, DeFi, etc.”

He also shared his thoughts in a blog on what crypto regulation should look like, specifically saying it’s important that “on-chain code and DeFi remain free and open, and uncensored.”

Even so, Bankman-Fried, chief of a centralized crypto exchange, has been criticized for supporting a bill that appears to threaten decentralized protocols.

Concerns about Congress choking decentralization

On the critical side of the debate, Web3 startup accelerator Alliance DAO disparaged the DCCPA bill, saying it forces human intermediation and compels projects to sacrifice decentralization. 

The DAO reckons the bill does not clarify what a digital commodity is, or make clear the distinction between tokens that are commodities and those that aren’t.

Loading Tweet..

Framework Ventures’ co-founder Vance Spencer also voiced opposition, saying the venture capital firm “opposes the DCCPA and the shadow cabal that is trying to make it a reality.”

“DCCPA kills DeFi and cedes market share to the centralized exchange that is pushing it,” Spencer added.

Most crypto exponents hope the draft can be amended to treat DeFi fairly.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 24 - 26, 2026

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Unlocked by Template (1).jpg

Research

As AI supercharges surveillance, privacy becomes a prerequisite and the winning stack will combine confidentiality with selective disclosure. Zcash’s Tachyon, composable standards on Ethereum/Solana, and compliance-aware pools aim to make private rails the new norm.

article-image

The startup says it aims to rival Stripe and Worldpay by using stablecoins to speed merchant settlements from days to seconds

by Blockworks /
article-image

“S&P 500” for crypto comes as segment gains “established role in global markets,” S&P exec says

article-image

The S&P Digital Markets 50 Index combines 15 cryptocurrencies with 35 crypto-linked companies, offering investors hybrid exposure

by Blockworks /
article-image

Gnosis is betting that openness — not ownership — will define the future of onchain money

article-image

Crypto’s quest to imbue shareholder protections for tokens

article-image

Grass previously raised a seed and Series A rounds and plans to utilize the token purchase to execute on its roadmap