DeFi
Senator Lummis ‘deeply concerned’ about Biden administration’s actions against DeFi and non-custodial wallets
Senator Cynthia Lummis expressed deep concern regarding recent actions by the Biden administration, which it perceives as a threat to the principles of the Bitcoin network and the DeFi sector as a whole.
In a statement released May 1, Lummis criticized the Department of Justice’s (DOJ) latest report legal interpretationswho argue that non-custodial software platforms – like wallets – could be regulated as money transfer services.
According to Lummis, this position contradicts existing Treasury guidance and undermines the rule of law and fundamental American property rights. She says:
“The Department of Justice’s hyper-aggressive argument that non-custodial software can constitute a money transfer service contradicts existing Treasury guidance, common sense, and violates the rule of law.”
She further emphasized that such interpretations threaten the very core of individual freedom in the ownership and management of digital assets.
‘Your keys’
Lummis, a vocal supporter of Cryptography in Congress, argued that the ability to hold one’s own cryptographic keys and operate a personal node is an essential aspect of digital property rights. She added that she remained committed to vigorously defending these rights, stating:
“I will do everything I can to fight for your rights to hold your own keys and run your own node.”
The senator’s concerns highlight ongoing debates within federal regulatory circles over the best approach to integrating crypto into the U.S. financial system without stifling innovation or infringing on individual freedoms.
The issue has become increasingly relevant as Bitcoin and other digital assets gain greater acceptance and spark discussions about appropriate regulatory frameworks.
The DOJ’s interpretation has sparked a significant backlash among crypto advocates, who argue that such regulatory measures could have chilling effects on the development of the DeFi ecosystem. They believe excessive regulation could stifle innovation and restrict the United States’ potential growth as a leader in the digital finance industry.
Legal experts are divided on the issue, with some suggesting that the DOJ’s stance is necessary to prevent illicit activities often associated with decentralized platforms, such as money laundering and fraud. Others argue that the federal approach needs to be more nuanced to protect consumers and the entrepreneurial spirit of the growing sector.