SEC Commissioner says new policies are threat to Defi industry
US securities and exchange commission is planning to bring more policies against Decentralized crypto platforms.
Crypto and the bokchain market always work on a new trend. In almost every year, a new trend enters in market. For example, the current trend is the crypto is NFTs and Metaverse trend and it seems that NFTs based projects are not going to see any downfall. In 2019-20, the crypto market saw a new trend Defi but actually, the entry of Defi-based projects showed impact in ending of 2020 and the beginning of 2021. Under the Defi-based platforms, every person can invest, buy and sell without any restriction of the exchange service provider. But due to its highly decentralized nature, the majority of the bad actors are trying their best to use such platforms illegally to exchage funds
Hester Peirce, SEC Commissioner, stated that the SEC agency will issue its updated definition on the exchanges. And the modernized defination on crypto exchange may result in a big threat for the decentralized platforms (DeFi).
Earlier this on 26 January, Gary Gensler, chairman at SEC agency, stated that we need to update the rules and laws to remain progressive. And also asserted that systems should be adapted to the rules to pace with the “increasingly electronified” systems that trade government securities.
“Over the decades since Congress put in place the definition of an exchange, there have been many changes to platforms — in particular, that they are increasingly electronified.”
Peirce noted that new rules and definitions may increase the new restrictions and more exposure to the services of crypto exchanges, Defi and CeFi.
Overall, Peirce tried to say that new provisions are specially targeted to the Defi protocols.
Earlier this, the SEC chair said that there are multiple Decentralized exchanges and the majority of them are not decentralized in actuality and the owners of those exchanges can manipulate the exchange’s operations. Besides this issue, Gary pointed out that there are many crypto assets are operating in this industry as Digital assets, while they are security, as per the definition of the SEC agency.
Read also: Crypto trading volume surges by 56.26% within 24 hours: India
