Uniswap, a16z Urge Senate to Rethink DeFi Regulation

Senate Faces Pressure to Adjust RFIA Bill for DeFi regulation

The Senate once again entered the center for crypto hit. A newly proposed crypto bill, named as Responsible Finance innovation Act (RFIA) of 2025, is gathering significant attention, especially from the Decentralized Finance world. But not everyone’s on board with how lawmakers are approaching DeFi regulation.

Source: X

Will New Senate Rules Choke Decentralized Finance Innovation?

This week, the Decentralized Finance education fund (DEF), a lobbying group backed by major crypto players like a16z Crypto, Uniswap Labs, Paradigm, Multicoin capital, and the Solana Policy Institute, submitted a strong response to the Senate Banking Committee. They are not opposing DeFi regulation, but they want to make sure it doesn’t treat decentralized developers like centralized banks. 

Is the Platform Being Misunderstood?

The biggest concern? That lawmakers don’t fully understand the difference between DeFi and traditional finance. Should a developer who writes open-source code for decentralized protocol be treated the same as a financial company that holds customer funds? DEF says no and warns that confusing the two could harm innovation in the U.S.

They have asked the senate to adopt four key principles:

• Don’t treat Decentralized Finance devs like custodial firms

• Use clear definitions to decide when a project is actually decentralized

• Make sure only true intermediaries have to register

• Keep the law neutral, it should apply to all tech the same way.

Tornado Cash Case Raises the Stakes

The ongoing trial of Roman Storm, a developer of the privacy tool Tornado Cash, has only made things more striking. Storm is being held because criminals used his code, but the crypto community argues that writing and publishing code is not the same as helping someone commit a crime.

Could the Senate’s new bill make more developers vulnerable to prosecution just for building software? DEF thinks it might, and that is why they are pushing for stronger protections. 

The State vs. Federal Law Dilemma

There is also a problem with state-level laws. Right now, DeFi regulation are different from state to state, creating a web of rules. According to DEF, this opens the door for large financial institutions to target projects by supporting stricter enforcement in states where it benefits them.

That’s why DEF wants the federal law to override state rules DeFi regulation, ensuring one clear, consistent national standard.

What’s Next?

The Senate Banking Committee welcomed the comments. But will they lead to real changes? The coming weeks will show whether lawmakers are willing to adjust the bill or stick to their original path. 

One thing is certain, how the U.S. handles DeFi regulation this year will shape the industry’s future for years to come.