What does the US SEC think about the DeFi boom?

As the DeFi market continues to boom, some US SEC commissioners were interviewed and expressed their views on decentralized finance (DeFi).

The current upsurge of DeFi has not caused much attention and sensation at the level of the US Congress. However, the US SEC has paid attention to DeFi. SEC Commissioner Hester Peirce said in an interview that DEFI regulation will not become a top priority this week, but in 2020, she and other members of the SEC are paying close attention. Booming DeFi and the looming regulatory challenges it may bring.

The total lock-up volume of the DeFi protocol on the Avalanche chain is US$11.47 billion: According to Jinse Finance, according to data from DefiLlama, the total lock-up volume of the DeFi protocol on the Avalanche chain is currently US$11.47 billion, an increase of 1.82% in 24 hours. The top five locked assets are AAVE ($2.77 billion), TraderJoe ($1.69 billion), Benqi ($1.56 billion), Curve ($1.11 billion), and multichan ($912 million). [2022/1/16 8:52:09]

Peirce, more than any other commissioner, has long developed a unique interest in both the crypto ecosystem and the broader implications of digital assets. In her speeches and regulatory proposals, she has consistently expressed a desire to protect innovation without allowing it to spin out of control and hurt investors.

Data: The total lock-up volume of the current DeFi protocol is 247.88 billion US dollars: According to news on December 29, according to Defi Llama data, the current total lock-up volume of the DeFi protocol is 247.88 billion US dollars, a decrease of 2.99% in 24 hours. The top five locked assets are Curve ($22.99 billion), Convex Finance ($19.02 billion), Maker DAO ($18.02 billion), AAVE ($14.53 billion), and WBTC ($12.35 billion). [2021/12/29 8:13:02]

DeFi takes this balancing act to new heights, she said. She has learned how many digital asset projects work, but admits that a DeFi education still has a long way to go. “I think some of the activity in DeFi will help me try to define more of what decentralization means,” said Peirce. In her view, these projects seem to be trying to complete the same period that emerged during the 2017 IC0 boom. Many items of different things. Specifically, the DeFi revolution seems to have a broader agenda than ICO.

The average decline of the DeFi concept sector today is 9.77%: Jinse Finance and Economics shows that the average decline of the DeFi concept sector today is 9.77%. Among the 47 currencies, 2 rose and 45 fell, among which the leading currency was: YFV (+3.43%). The leading currencies are: IDEX (-17.74%), HDAO (-17.55%), MLN (-16.73%). [2021/6/8 23:19:57]

Regulators have been keeping an eye on the DeFi space and are aware of the recent growth, but in a year with so many unprecedented events, the explosion of new DeFi projects is not the most eye-catching. "It (the rise of DeFi) is a big thing, but it's still relative," she said.   "So if it gets bigger and more influential, then I think we'll see more regulation Attention, but this is not to say that there is no regulation paying attention to DeFi now.”

In July, the total value locked in DeFi exceeded $2 billion, and the market cap exceeded $7 billion, but compared with traditional markets, this is still a drop in the bucket.

DeFi teams and their advocates have yet to seek formal guidance from the agency, Pierce said. In the past, she said, she has received more questions about the regulatory role of decentralized exchanges (DEXs) than she does today. Apart from the type of lawyers who occasionally express interest in DeFi-specific regulations on Twitter, not many people in the industry have engaged with the SEC.

But those conversations will eventually need to happen, Pierce said, adding that she welcomes the process because DeFi could challenge the U.S. view of financial regulation.

Digital assets already pose unique challenges for regulators, and DeFi is another offshoot with its own nuances. This presents a unique challenge: Who should be responsible? When the goal is to build networks that rely on smart contracts, rather than people managing them, so that if something goes wrong, these networks can attribute the error to the contract rather than the administrator.  

“This will challenge the way we regulate. It makes us ask, what do we think the role of regulators is in DeFi?” Pierce said.

It's unclear whether existing regulatory proposals can fix that. For example, Peirce proposed a regulatory safe haven for token projects in February. The proposal is currently undergoing a public comment period.

While the policy will provide some time for the blockchain network to become truly decentralized, it is unclear whether the policy can be seamlessly applied to DeFi governance tokens.

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