Home
News
- The SEC commissioner, Caroline Crenshaw wants DiFi to cooperate with the SEC.
- In the Inaugural issue of the international journal of blockchain law, Crenshaw expresses concerns of lack of transparency & pseudonymity regarding transactions.
- The SEC commissioner believes that insiders reap the rewards in excess in comparison to retail traders.
As the United States figures out cryptocurrencies & blockchains in general, SEC commissioner Caroline Crenshaw has pointed out various pros of decentralized finance& cons of not adopting a regulatory framework around the industry.
Caroline also mentioned her role as the SEC commissioner & iterated that she is obliged to help & ensure that market practices, whether new or old, are conducted fairly & provide a level playing field to all investors.
In the first issue of “The International Journal of Blockchain Law”, the commissioner pointed out her belief that the DeFi world should address concerns with transparency & pseudonymity while complying with the rules of SEC.
ALSO READ – THANK GOD FOR NFTS: HOW CRYPTOS ARE BEING RESHAPED
Then the governing head points at the fact that there wasn’t a broad adoption of the regulatory frameworks to date that protected investors in the other markets like the crypto markets. Caroline further believes that all DiFi projects should be openly discussed with the SEC so that it could address the concerns related to pseudonymity.
Caroline believes that due to lack of transparency & protections into the DiFi world, a two tier market is consequently created where investors & insiders gain outsized returns compared to retail traders.
Even though almost all the codes for DiFi projects are open sourced & all transactions are located on the blockchain, she argued that it was not sensible to create a system where investors were also demanded to be highly educated in interpreting the complex codes of major blockchains. She also mentions that professional investors have an unfair advantage who can perform audits & combinations on code through their development teams.
Crenshaw further addresses the concerns of pseudonymity in transactions, thereby making it challenging to analyze market manipulations that happen with the help of bots & unlawful trading. She then states that investors are most vulnerable to losses due to market manipulation since indicators become unreliable.
The SEC commissioner also argued that instead of marking pseudonymity as a burden, the world of DiFi promotes pseudonymity & anonymity as features of the product, however, she doesn’t believe that investors would choose it over making money.
However, many crypto enthusiasts believe that Crenshaw’s regulations are more centralized and do not go well with the theme of DiFi. According to an opinion, they’re less favored than SEC commissioner Hester Peirce who suggested the safe harbor law, which grants a minimum of 3 years of leisure to developers to create their decentralized fair networks.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
