Weighing In Defi Token Regulation Debate Is SEC Commissioner Peirce: Defi Will Self Correct In Twelve Months As Panel Predicts

What Does Commissioner Hester Pierce Have To Say? 

While defi tokens carry some equity-like benefits, she believes that giving something away is distinct from selling something as the US Securities and Exchange Commissioner, Hester Peirce says. It was observed that Pierce says questions about that regulatory structure and also how these tokens could affect the corporate governance will continue to linger as a result of this lack of clarity. 

Also, the Commissioner Pierce now says representing her personal views that were made in response to those questions of treating governance tokens as also that are used by many decentralised finance platforms as securities speaking at the LA Blockchain Summit

Although she cautions that there are other people on the commission who might look at the same facts and circumstances differently than she does, instead Pierce suggests that people should come to talk thereby to the SEC all about how they have the intend to distribute those tokens. 

The Stand Of US Regulators On ICOs. 

Subsequently, the US regulators as also including the SEC have pursued those individuals and the entities that were involved in raising funds via ICOs within the United States jurisdiction. 

The regulators have charged many such individuals and entities including gaming platform Unikrn for the alleged securities regulations violations that related ICOs of 2017 citing Section 5(a) and 5(c) of the US Securities Act. Pierce publicly dissented to the $6.1 million fine saying this sends the wrong message to innovators in Unikirn’s case. 

The Crypto Mom as Pierce is affectionately known in crypto circles prefers what she terms the safe harbour approach instead of imposing stiff fines. Henceforth those cryptocurrency companies are shown to be given three years thereby to devolve power to their communities just before the SEC takes action for those alleged violations of the securities laws under this plan. 

Thereafter even Pierce’s favourable stance on cryptos has not stopped the SEC from reportedly hinting that airdrops that are very common in the defi space is also been seen as security offerings. It was seen as regulators pouncing on defi where that hint together with the growing concerns about the number of scams as well as a lack of regulation in the space. 

According To Jason Lau

Finding that the majority of the panelled experts believe the defi industry will self-correct in the next twelve months was the recent Finder’s Cryptocurrency Predictions Report. One panelist Jason Lau COO at Okcoin told interviewers that the long-term outlook for defi is positive but says there will be many bumps in the road, for instance in remarks obtained during the survey.

Saying the protocols are still in their infancy and have huge potential moving forward was Lau’s sentiments also echoed by Gavin Smith. It was also found that a report thereby found 64% of the panellists that were actually expecting Defi growing in both values locked as well as user count over the next 12 months.

They believe Defi could be headed for troubled times as still about 13% of the panellists disagree instead. Saying he thinks defi is growing too fast in an irresponsible and unregulated manner is one such panellist sharing this particularly pessimistic outlook is Coinmama CEO, Sagi Bakshi. 

Quoting Bakshi as saying the survey report:

Something like Mt.Gox, it will implode with a huge loss of users’ funds. 

They also all concede there are barriers to growth although the majority of the panellists are optimistic about the future of Defi. Challenging defi growth the report states that some 73% say are scams, excessive hype, and market manipulation.

The Final Thoughts 

Making it harder for defi to grow, half say general cryptocurrency frictions such as private key management and price volatility while 43% say a lack of public awareness comes as a major obstacle. It was therefore making it harder for further adoption, as just over a quarter of panellists, almost 27%, as they say, defi has a lack of genuine value and real-world applications. 

Defi is always on demand. Whether as tokens or ICOs, they always have to manage the expectations of investors as well as regulators. As regulators come to be more and more sceptical, there is always a shroud of mystery in their dealings. So, while we watch, there is more movement than we have observed hereafter. 

We help you get even more from the experts as surveys quote many of them speaking up and against them with doubts of credibility as well as some supporting the challenge faced by them. So, for now, we sign off but promise to help you more with all that information we get through various sources.