• The U.S. Senate has proposed a new act that could limit DeFi’s growth in the country.
• DeFi protocols remained unaffected, and tokens did not witness any price depreciation.

Over the last quarter, the DeFi sector experienced limited growth, with most protocols showing underwhelming performance. Liquid Staking emerged as an exception, demonstrating stronger results compared to the vast majority of other protocols.

Realistic or not, here’s UNI’s market cap in BTC’s terms

However, things could get much worse for the DeFi sector going forward due to the U.S Senate’s recent proposal.

What is the U.S. Senate up to?

The U.S. Senate proposed a new bill that supposedly aims to combat money laundering, crypto-facilitated crime, and sanctions violations. The legislation aims to subject DeFi services to similar anti-money laundering (AML) and economic sanctions compliance requirements as other financial entities, such as centralized crypto trading platforms, casinos, and even pawn shops.

The goal is to ensure greater accountability and security in the crypto industry while curbing illicit activities associated with cryptocurrencies.

The proposal highlights the concerns of the U.S. government that DeFi has become a favored avenue for bad actors, including criminals, drug traffickers, and hostile state actors like North Korea, to transfer and launder illicit funds.

According to the proposal, these entities have shown a keen interest in exploiting the decentralized nature of DeFi to facilitate illegal activities, such as cross-border fentanyl trafficking and financing the development of weapons of mass destruction.

The bill will be called Crypto-Asset National Security Enhancement and Enforcement (CANSEE) Act and will be used to target money laundering and sanctions evasion involving DeFi.

How will these sanctions work?

The legislation specifies that if a sanctioned individual, such as a Russian oligarch, utilizes a DeFi ser

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Author: Himalay Patel

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