Pressure to Regulate DeFi Intensifies: SEC, Industry Seek Compromise

Pressure to Regulate DeFi Intensifies: SEC, Industry Seek Compromise

The U.S. Securities and Exchange Commission is stepping up its push for decentralized finance (DeFi) regulation and user self-governance. On Tuesday, the cryptocurrency task force released two new proposals that focus on retail rights and rules for tokenized stocks. The move comes as Congress is considering the CLARITY legislation, which is intended to set rules for crypto markets.

The Louisiana commission’s proposal cites HB 488, a state law that protects the rights of digital asset users. It warns of exemptions in federal proposals that could allow platforms to avoid transparency and investor protection obligations, increasing the risk of fraud.

A letter from the Blockchain Association asks the SEC for clearer rules for companies that trade tokenized assets on their own account, without reaching out to customers. He warns that existing rules are designed for traditional markets and need to be adapted to the specifics of smart contracts and decentralized platforms.

While the industry calls for more clarity, negotiations on the CLARITY Act continue in Congress. White House Senior Advisor Patrick Witt called on the industry to compromise in order to pass the law, emphasizing the need to balance issues of stability, liquidity and investor protection.

Coinbase CEO Brian Armstrong praised the progress made in the field of regulation in Davos and emphasized the importance of cooperation between regulators and the industry. The pressure for clear rules and protection of user rights continues to grow, which could fundamentally affect the future of DeFi.

*This is not an investment recommendation.

The Coingarage Team