Bill · H.R. 4394· House(119-HR-4394)
the CODE Act of 2025
- Introduced
- 7/15/2025
- Last activity
- 7/15/2025 — Referred to the House Committee on Financial Services.
- Sponsored by
- Sean Casten
- Cosponsors
- None
- Introduced
- In Committee
What this bill would do
This bill, known as the "Compliant Operations of Decentralized Entities Act of 2025," directs the Secretary of the Treasury to create a public-private partnership program. This program focuses on examining innovative anti-money laundering and cybersecurity solutions for decentralized finance services. The initiative aims to integrate controls like identity verification and sanctions compliance directly into decentralized smart contracts. Additionally, the bill requires the Financial Crimes Enforcement Network to publish an advisory regarding the responsible operation of these services. Finally, it mandates a new rule to define these services and require them to maintain specific risk-based compliance programs.
Yes· 3 of 6
Does this better protect the country from computer attacks?+6
The bill specifically targets cybersecurity risks in decentralized finance to prevent exploitation by foreign actors.
Does this give the federal government more power?+5
The bill expands the regulatory oversight and rulemaking authority of the Secretary of the Treasury over decentralized entities.
Does this put more rules on large technology companies?+4
The bill establishes new regulatory requirements and definitions for decentralized finance services.
The opposite· 3 of 4
Would business owners be better off under this?-4
The bill imposes new regulatory and compliance costs on decentralized finance business owners.
Does this protect people from being watched or searched?-3
The requirement for identity verification in smart contracts may reduce user anonymity and privacy.
Does this give the government more power to monitor people inside the country?-2
The mandate for identity verification and increased monitoring of decentralized services may increase financial surveillance.
Who it would affect, and how
Potential Positive Impacts for People
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Enhanced National Security and Reduced Illicit Activity: By developing technological controls for anti-money laundering, the bill addresses concerns that unregistered cryptocurrency entities enable illicit activity that threatens national security (Section 2).
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Improved Cybersecurity for Digital Assets: The program seeks to integrate cybersecurity controls into smart contracts to help protect against exploitation by threat actors, such as those from North Korea (Section 2, Section 3(a)(2)).
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Standardization of Compliance: The bill aims to provide a coherent and consistent set of technological controls for the cryptocurrency ecosystem, which currently lacks standardization across decentralized finance services (Section 2).
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Innovative Financial Controls: The partnership will consider creating a regulatory gateway that allows for upgrading smart contract behavior after it has been deployed, allowing for more adaptable security measures (Section 3(a)(4)).
Potential Negative Impacts for People
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Increased Regulatory Burdens on Decentralized Services: The bill requires the Secretary of the Treasury to issue rules that expressly require decentralized finance services to implement and maintain risk-based anti-money laundering and sanctions compliance programs (Section 5).
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New Definitions and Oversight: The Secretary of the Treasury is tasked with further defining terms like "decentralized finance service" and "decentralized smart contract," which will subject these entities to specific regulatory requirements (Section 5).
Groups and Interests Ranking
Every group the model scored this bill for, from -10 to +10. Hover a score for the reason it gave.
- Education And Technology
- Increases Big Tech Regulation+4Improves Data Privacy+2
- Demographic And Interest Groups
- Good For Business Owners-4
- National Security And Foreign Policy
- Improves Cybersecurity Defense+6Increases Domestic Surveillance-2
- Economy And Finance
- Improves Consumer Protection+3
- Governance And Ideology
- Increases Federal Power+5Improves Government Transparency+2Improves Privacy Rights-3Improves Freedom Of Speech-2
- 7/15/2025
- Referred to the House Committee on Financial Services.
- Introduced in House