I've become very curious about the crypto bill which is being considered in the US Senate (and which is currently being delayed because of pushback from Coinbase) [https://www.reuters.com/sustainability/boards-policy-regulation/coinbase-cannot-support-crypto-bill-current-form-ceo-armstrong-says-2026-01-15/]. Coinbase is a centralized financial company which has its own goals, so I wanted to check it from DeFi perspective.

And since this language is not very well comprehensible by humans (but very precise) - I decided to vibe-read it using ChatGPT. Looks surprisingly good - try it yourself! You just attach a file and question GPT about it. Here's what I've got: https://chatgpt.com/share/6968d01d-e2dc-800d-a9b6-ccc919a7e624

Key takeaways:
- DeFi will not need AML/KYC if it is truly decentralized;
- Decentralization is defined by who controls the governance. Founders control it = non-decentralized, founders + their VC buddies = non-decentralized, being able to make contractual agreements on vote outcomes = points to non-decentralized;
- Surprising about decentralization: DELEGATION CAN MAKE PROTOCOLS NON-DECENTRALIZED! Yes, if all votes delegate control over the protocol to a company which operates it - non-decentralized. Direct democracy (like in Curve) for the win!
- Static HTML/JS frontends do not need AML/KYC but they may need to block by IP or wallet with sanction lists IF OPERATED/OWNED BY US PERSONS/ENTITIES. Yes you read it right: frontends outside the US = no need to apply these filters EVEN IF US USERS ARE ALLOWED. That's AI told me though.
- Decentralized yield bearing stablecoins like sDAI or scrvUSD are allowed without restrictions. WOW!
- Farming yield from federal reserve or banks and passing to users is NOT allowed. That's what Brian Armstrong doesn't like.
- Ethena's sUSDe may classify as security because its yield is clearly generated in a non-decentralized fashion. Who knows - maybe this will change in the next versions of the proposed bill?

Overall, I see this as favourable for truly decentralized finance (like Curve or Yield Basis). If you build something which is not yet decentralized but can be - move that way!

#DeFi #crypto #regulations #USA