United States:
Another DeFi Yellow Flag Thrown By An SEC Commissioner
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The decentralized finance (DeFi) community must address issues
of “transparency” and “pseudonymity” before it
can deliver on its “new and interesting potential,” cautioned SEC Commissioner Crenshaw in a
recent article published in the inaugural issue of The
International Journal of Blockchain Law.
Noting that not one DeFi participant within the SEC’s
jurisdiction has yet to register with the SEC, Commissioner
Crenshaw urged DeFi participants to engage with agency staff,
warning that “without a common set of conduct expectations,
and a functional system to enforce those principles, markets tend
toward corruption, marked by fraud, self-dealing, cartel-like
activity, and information asymmetries.”
1. Transparency
Commissioner Crenshaw attempted to debunk the idea that DeFi is
“more egalitarian and transparent” than traditional
finance (TradFi).Â
She stressed that “retail investors are already operating
at a significant disadvantage to professional investors in
DeFi” because “much of DeFi…
