Why Peirce thinks that DeFi would provide SEC with a successful regulatory test

Spread the love

The SEC commissioner described the DeFi space as “a work in process” but “alluring.” overall.

Hester Peirce, U.S. Commissioner. The Securities and Exchange Commission, dubbed “Crypto Mom,” embraces the challenge of controlling decentralised finance.

In a speech at the George Washington University Law School event on the digital economy, Peirce said decentralised finance, or DeFi, may be the alternative legacy of the financial system that many are seeking, given the rise in anti-Wall Street sentiment surrounding the short-term tightening of GameStop stocks. The SEC Commissioner said that the technology will provide the regulator with a “very good test” to protect investors and markets.

“Although a work in progress with all the growing pains and rough edges that implies, DeFi’s promises of democratization, open access, transparency, predictability and systemic resilience are alluring,” said Peirce. “We regulators, mindful of the potential upsides and downsides, need to provide both legal clarity and the freedom to experiment so that DeFi can compete with CeFi to offer investors financial services.”

Peirce added that the SEC should look for ways to insure that markets are inclusive, considering the anger that many have expressed since the 2008 financial crisis, but most recently over the GameStop trades. She said the Commission should be “more proactive in embracing technology” in order to make the economy work better for more people.

“The digital economy does pose some new regulatory challenges, but it also gives us new tools to meet those challenges. We should use those tools with genuine care for the freedom of the people we regulate.”

The Commissioner has previously confirmed that DeFi has generated new problems for the SEC on a range of outstanding legal issues. While certain space ventures are likely to come under securities regulations, there are several DeFi offerings made up of tokens that lack liquidity and are used to fund blockchain projects. She warned developers to talk to the SEC if the project “looks like the traditional security.”

 261 Interactions,  2 today

Trump’s former economic adviser on why Bitcoin is not a “trustworthy store of value.”

On its way down, the price of Bitcoin sometimes encounters several bearish sentiments arguing that the currency should not have Read more

XRP holders denied participation as third-party claimant in the Ripple-SEC lawsuit.

The judge presiding over the SEC-Ripple case has rejected the assets holders' request to appear as third-party claimants in the Read more

Over $40b in stimulus payments likely to end up invested on Bitcoin.

Following the approval of the trillion-dollar stimulus programme by US officials, many Americans got their own stimulus checks. According to Read more

According to Coin Centre, the proposed FinCEN law is a “grave danger to personal privacy.”

The advocacy group takes aim at the new obligation to produce currency transaction reports for crypto transactions in its most Read more

Floyd Mayweather-promoted ICO’s Co-founder jailed for 8 years .

The co-founder of the fraudulent 2017 ICO Centra Tech was sentenced to eight years in prison for his role in Read more

BitGo is granted a confidence licence by New York regulators

Goldman Sachs-backed crypto custodian BitGo has secured a licence from the New York Trust to act as an independent custodian Read more

Ripple is loyal to San Francisco, said co-founder Chris Larsen.

In October last year, Chris Larsen, co-founder of Ripple, said that the company would consider moving to other countries, citing Read more

Yellen’s criticism of Bitcoin dismissed by Miami Mayor

Miami and Mayor Francis Suarez have worked over the last few weeks and months to position the city as the Read more

US judge dismisses the case of crypto fraud against the BNT token issuer.

The U.S. Federal Judge ruled that the case against the crypto corporation Bancor had been dismissed, citing the lack of Read more

Leave a Reply

Contact Us