The Senate Comes for DeFi
Dear Bankless Nation,
A new Senate bill aiming to upend DeFi emerged this week with some powerful political backers. Get informed, then get loud!
For our weekly recap, we dig into:
- U.S. Senate goes after DeFi
- EthCC announcements
- Feds commit to crypto crackdown
- Very illicit crypto activities
- Crypto VCs get some money
- Bankless team
📅 Weekly Recap
1. U.S. Senate goes after DeFi
We've seen an endless number of efforts emerge in Congress over the past couple years to regulate crypto in some capacity. The reality is that most of these efforts are proposed to grab headlines and wind up dead on the floor soon after.
The Crypto-Asset National Security Enhancement and Enforcement (CANSEE) bill feels different. It's a real threat.
Unlike many crypto-related pieces of legislation, it's a bipartisan bill backed by some heavy hitters in the Senate. The effort aims to force DeFi services – as well as Bitcoin ATMs – to use American anti-money laundering (AML) rules and comply with U.S. economic sanctions.
As expected, the bill's backers are blaming plenty of the world's ills on a DeFi's lack of AML, claiming that this is "facilitating narco-trafficking, WMD proliferation, ransomware attacks, and other threats to national and economic security."
It will come as no surprise, but this is not a good bill. It's overreaching and effectively aims to ban decentralized software. Coin Center called it "unconstitutional."
2. EthCC announcements
In case you missed it, seemingly every crypto project or company in the world descended on Paris this week to talk about a new launch at the EthCC conference.
We already did a very thorough roundup of the week's launches so if you're interested in hearing what Uniswap, Lens, Chainlink, Starknet, Gnosis, Mantle, Linea, Solana and Tezos revealed this week, check out our roundup below!
3. Feds commit to crypto crackdown
After a pretty humiliating early loss in the Ripple Labs case, a "disappointed" Gary Gensler wants an additional $72 million to expand his agency to keep up with the "Wild West of the crypto markets, rife with noncompliance, where investors have put hard-earned assets at risk in a highly speculative asset class.”
Meanwhile, the U.S. DoJ has already committed to doubling the staff on its crypto crime team. Let's hope they focus on some actual criminals in the space and actually help retail investors, yeah?
4. Very illicit crypto activities
While Senators argued this week that DeFi degens were trafficking weapons of mass destruction and helping the Sinaloa cartel import fentanyl, there indeed was a swarm of new activity from shadowy crypto insiders placing their bets on a new crypto use case...
These degens were betting on... hamster races.
The platform Hamsters.gg attracted attention on Crypto Twitter this week by allowing users to bet stablecoins on actual hamsters "racing" each other on a short racetrack live-streamed for all to see.
5. Crypto VCs get some money
In 2021 or 2022, we wouldn't have included a nine-figure venture capital fund raise from a crypto firm; they were seemingly happening every week! But 2023 has been a different beast.
This week, Coinfund debuted a $158 million fund, its latest dedicated vehicle for crypto seed investments. It's one of the largest fresh crypto funds to arrive this year and it's coming at a time when other venture capital funds are moving away from the sector or betting it all on AI.