U.S. crypto regulation must not hinder personal freedom

  • The SEC doesn’t want to hinder the personal freedom of individuals
  • With the expanding DeFi sector difficulties of regulators have also been increased
  • Trade monitoring system should track the market not individuals
  • A new regulatory approach is required for DeFi sector

Hester Peirce, currently serves as a commissioner in the U.S. Securities and Exchange Commission (SEC), and also known as Crypto Mama, have recently mentioned in a speech that regulations should not hinder the freedom of individuals. According to Pierce, as the crypto space is evolving the space will have to face new challenges like the Securities and Exchange Commission (SEC) of the United States is facing whether virtual assets are securities and how regulated businesses can store such assets in legal compliance.

The Soaring DeFi sector brings difficulties in regulatory decisions

Decentralized finance (DeFi) is expanding like the COVID-19 virus, which is also forcing regulatory decisions. Before the introduction of DeFi applications, regulators used to regulate exchanges which consisted of centrally managed exchanges and brokers. Pierce explained that in the case of the DeFi sector, there are no such entities like centralized managed exchanges and brokers. Indeed the adoption of DeFi is from both outside and inside of the traditional financial system. 

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According to regulators, brushing aside the ability to increase the freedom of individuals would result in weakening the power of new technologies to provide opportunities for individuals having limited freedom, due to the lack of access to traditional financial systems.

Trade Monitoring system as a concern about personal freedom

In concern of regulating digital currency, the other matter is integrated transactions monitoring systems. According to Pierce, it is another matter of concern from the perspective of individual freedom. The monitoring systems are such as CAT and CONSOLIDATED Audit Trail. Indeed CAT is developed by the European Commission in cooperation with several self-regulatory bodies that can track orders for all stocks and options passing through the market. According to Pierce, the tracking of what is happening in the market by the regulator is an undeniable issue. 

DeFi regulations are the current headlines

It is observed that the regulation of the DeFi sector is in debate everywhere, as every one is discussing how to regulate DeFi applications. Pierce mentioned that last month in the V20 Cryptocurrency Industry Summit, it was discussed that a new regulatory approach is required for the DeFi sector. According to Pierce, the whole DeFi community needs to discuss the anti-money laundering guidelines of the Financial Action Working Group (FATF), which is an international regulatory body.

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Ritika Sharmahttp://www.thecoinrepublic.com
Ritika Kumari Sharma is an Economics Honors graduate from the University of Calcutta. She is completely into finance and believes that cryptocurrencies are the future. She is an enthusiast learner about the cryptocurrency and blockchain technology.

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