DeFi Regulation: Where US Regulators Should Draw the Line
The US federal agency's approach to the DeFi market has raised several concerns about the industry's future: Experts decide on the right approach.
, one of the fastest growing ecosystems in the cryptocurrency market, has long been a dilemma for regulators, given the decentralized nature of the space. </p>
<p>In 2022, regulators in the United States paid particular attention to the nascent zone with particular attention to the end of the anonymous nature of the ecosystem.</p>
<p>DeFi protocols allow users to trade, borrow, and lend digital assets without having to go through an intermediary. DeFi ecosystems are inherently decentralized, with the majority of projects being run by automated smart contracts and decentralized autonomous organizations (DAOs). Most DeFi protocols do not require heavy know-your-customer (KYC) requirements, allowing traders to trade anonymously.</p>
<p>A leaked copy of a US bill in June showed some of the major areas of concern for regulators, including DeFi stablecoins, DAOs, and crypto exchanges. The bill paid particular attention to the protection of users with the intention of eliminating any anonymous project. The bill requires any crypto platform or service provider to legally register in the United States, whether DAO or DeFi.</p>
<p>Sebastien Davies, director of institutional infrastructure and liquidity provider Aquanow, blamed regulators' lack of technological understanding for the regressive approach. He told Cointelegraph that events such as the sanctioning of Tornado Cash users after the app was added to the Specially Designated Nationals list produced by the Office of Foreign Assets Control demonstrate a lack of technological understanding. He explained:</p>
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The US federal agency's approach to the DeFi market has raised several concerns about the industry's future: Experts decide on the right approach.
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