Fun

SEC Commissioner Peirce Weighs in Defi Token Regulation Debate: Panel Predicts Defi Will Self Correct in Twelve Months

News Feed - 2020-10-09 08:10:46

SEC Commissioner Peirce Weighs in Defi Token Regulation Debate: Panel Predicts Defi Will Self Correct in Twelve Months


The U.S. Securities and Exchange Commissioner, Hester Peirce says while defi tokens carry some equity-like benefits, she believes that giving something away is distinct from selling something. As a result of this lack of clarity, Peirce says questions about the regulatory structure and how these tokens could affect corporate governance will continue to linger.


Speaking at the LA Blockchain Summit, the Commissioner’s remarks, which Peirce says represent her personal views, were made in response to the question of treating governance tokens that are used by many decentralized finance (defi) platforms as securities.


Instead, Peirce suggests that “people should come to talk to the SEC about how they intend to distribute tokens” although she cautions that “there are other people on the commission who might look at the same facts and circumstances differently than I do.”


Indeed, over the course of the year, U.S. regulators, including the SEC have pursued individuals and entities that were involved in raising funds via ICOs within the United States jurisdiction.


Citing Section 5(a) and 5(c) of the U.S. Securities Act, the regulators have charged many such individuals and entities, including gaming platform Unikrn, for alleged securities regulations violations that related ICOs of 2017. In Unikrn’s case, however, Peirce publicly dissented to the $6.1 million fine, saying this sends the wrong message to innovators.


Instead of imposing stiff fines, the “Crypto Mom”, as Peirce is affectionately known in crypto circles, prefers what she terms the “safe harbour” approach. Under this plan, cryptocurrency companies will be given three years to devolve power to their communities before the SEC takes action for the alleged violations of the securities laws.


Still, Peirce’s favourable stance on cryptos has not stopped the SEC from reportedly hinting that airdrops— which very are common in the defi space— could be seen as security offerings. That hint, together with growing concerns about the number of scams as well as a lack of regulation in the space, could see regulators pouncing on defi.


However, the recent Finder’s Cryptocurrency Predictions Report finds that the majority of the panelled experts believe the defi industry will self-correct in the next twelve months. For instance, in remarks obtained during the survey, one panellist, Jason Lau COO at Okcoin, told interviewers that “the longer-term outlook for defi is positive but says there will be many bumps in the road.”


Lau’s sentiments are also echoed by Gavin Smith, the managing partner at Panxora defi Hedge Fund, who says “the protocols are still in their infancy and have huge potential moving forward.” Meanwhile, the report found that 64% of the panellists actually expect Defi to grow “in both value locked and user count over the next 12 months.”




Still, about 13% of the panellists disagree, and instead, they believe Defi could be headed for troubled times. One such panellist sharing this particularly pessimistic outlook is Coinmama CEO Sagi Bakshi who says he “thinks defi is growing too fast in an irresponsible and unregulated manner.”


The survey report quotes Bakshi saying:It will implode with a huge loss of users’ funds, something like Mt. Gox.


Although the majority of the panellists are optimistic about the future of Defi, they “also all concede there are barriers to growth.” The report states that “some 73% say scams, excessive hype and market manipulation will challenge defi growth.”




Half say general cryptocurrency frictions — such as private key management and price volatility — will make it harder for defi to grow, while 43% say a lack of public awareness is a major obstacle. Just over a quarter of panellists (27%) say defi has a lack of genuine value and real-world applications, which will make it harder for further adoption.


Will the Crypto Mom’s safe harbour proposal win more SEC support? Tell us what you think in the comments section below.Yearn Finance Token Value Slides 67%, While Locked Value Loses Over $300MALTCOINS | 20 hours agoEthereum Transaction Fees Fall 82%, as Defi Hype EasesALTCOINS | 3 days agoTags in this storyAirdrop, Crypto Scams, Defi regulation, Defi token, governance tokens, hester peirce, ICOs, Securities Act, Securities Act Section 5(a), The US Securities and Exchange Commission


Image Credits: Shutterstock, Pixabay, Wiki CommonsPurchase Bitcoin without visiting a cryptocurrency exchange. Buy BTC and BCH here.Show comments

News Feed

China to Crack Down on Copyright Infringement Through NFTs
China to Crack Down on Copyright Infringement Through NFTs Authorities in China are going after creators of digital collectibles based on other people’s works of art, the us
Savannah Fortis10 hours agoGen Z in South Korea prefers XRP and other altcoins to BTC and ETH: ReportA report from a local South Korean publication found that 20% of Gen Z investors in the country hold XRP, the most sele
Bitget Wallet tops Nigeria’s app store as OKX exits market
Amaka Nwaokocha11 hours agoBitget Wallet tops Nigeria’s app store as OKX exits marketBitget Wallet’s surge in popularity among Nigerian users highlights its growing appeal in the Web3 space amid evolving digital fina
Biggest Movers: LTC Races to 9-Month High, ATOM Extends Recent Gains
Biggest Movers: LTC Races to 9-Month High, ATOM Extends Recent Gains Litecoin raced to a nine-month high on Feb. 1, following a breakout of a key resistance level. The surge in pri
David Attlee13 hours agoRipple’s major success in its court battle with the SEC: Law Decoded, July 10–17Ripple Labs scored a partial victory in its lengthy legal battle with the United States Securities and Exchange
5 Best Upcoming Meme Coins to Buy as US Could Introduce ‘GENIUS’ Stablecoin Bill
After a somewhat difficult start to the week, stablecoins, meme coins, and the crypto market in general saw a glimmer of light yesterday, with the introduction of the Guiding and Establishing National Innovation for US S
Asia’s Largest Web3 Event TOKEN2049 Hits 200 Sponsor Milestone, Announces New Headline Speakers
Asia’s Largest Web3 Event TOKEN2049 Hits 200 Sponsor Milestone, Announces New Headline Speakers press release SINGAPORE — 8 July 2022 — TOKEN2049, Asia’s prem
Turner Wright7 hours agoAs trial begins, Sam Bankman-Fried’s lawyers push to exclude testimony from FTX usersSam Bankman-Fried’s legal team has requested the court block certain witnesses offering testimony on how th
X suspends account that let users launch memecoins from an X post
Martin Young3 hours agoX suspends account that let users launch memecoins from an X postThe "makenowmeme" account on X purportedly provided a way for X users to create memecoins on Solana with a simple post.943
William Suberg8 hours agoDid SBF really use FTX traders’ Bitcoin to keep BTC price under $20K?Bitcoin sales by FTX come to light as part of the SBF trial, as one prediction suggests that they stopped the BTC price from
Amaka Nwaokocha1 hour agoGoogle to protect users in AI copyright accusationsGoogle explicitly stated that only seven products fall under this legal protection, excluding Google’s Bard search tool.484 Total views3 Total
Arijit Sarkar1 hour agoCFTC Commissioner plans to modernize investor protection with technologyTo minimize the damages caused by financial fraud, Romero proposed the formation of the National Financial Fraud Registry —