$ 1,250.29 4.30%
$ 41.35 1.64%
$ 0.072524 9.02%
$ 5.14 16.93%
$ 21,499.00 1.54%
$ 242.76 3.55%

Are regulatory consequences on DeFi impossible?

Regulatory consequences on DeFi

A California lawyer has said that there may not be regulatory consequences on DeFi despite the huge funds locked away. The Decentralized Finance sector boasts of nothing less than a total volume of $6 billion according to reports from DeFi Pulse. 

But despite the enormous amount of money locked away in the sector, a particular lawyer has given reasons why investors might escape regulatory consequences on DeFi as a result of the structure of the sector.

MD of a legal firm in California, Collins Belton, notes that legitimate DeFi projects will give law enforcement a tough time compared to Initial Coin Offering. Furthermore, he also said ICOs centralization and its security token issuance is not something that can be found in the DeFi sector.

Regulators leverage up by prosecuting some specific firms

According to Belton, regulators always note two things before looking critically at any business investment or operation. The first is if an organization can be held liable for a crime with the second being avoiding legal fees that may arise from violation

In Belton’s words, they are very selective when taking actions against firms and would easily make an example out of a firm so that firms that spring up in the future can learn from them. 

This move allows the regulatory authority to leverage up, Belton says. But in this case, Belton says regulatory consequences on DeFi might lack the much-needed reason to prosecute the sector.

Belton gives reasons why regulatory consequences on DeFi may not happen

Belton further says that since no one knows which market is good and which is in the DeFi sector, regulators would not know which to probe. 

Citing an example, he mentioned the buzzing project, Yearn Finance which is governed by some few token holders and has no real person responsible for prosecution in case of a sanction. This means that Yearn Finance(YFI) is immune to charges in case it folds up in the nearest future, which would mean millions of cash gone. 

Belton says the community do not care what happens to the developer of the project, but they are content as long as the project carries on this way. If the above is taken into consideration, then regulatory consequences on DeFi may not happen.

Kamsi King

Kamsi King

King Kamsi is a fintech and digital currency writer and enthusiast. He is keenly interested in blockchain and cryptocurrency and their global adoption. When not busy with writing, he can be found hobnobbing in forums with the best minds in crypto, both developers and startup founders.

Related News

Hot Stories

Crypto News Alert – A New Meme Coin That Will Process 50,000 Transactions Per Second
Shiba Inu price analysis: SHIB continues to rise with $0.00001350 in sight
Bitcoin price analysis: BTC slowly retests $21,500, ready to return lower?
Ripple price analysis: XRP price consolidates below $0.36, but bulls are optimistic
Ripple price analysis: XRP/USD set to break above $0.54 overnight

Follow Us

Industry News

Mastercard survey: 50% of Latin Americans use crypto
Margin calls and bot liquidations add chaos to crypto as its market cap hits $964b
Bitpanda lays off workers amid the market decline
Coinbase to launch Nano BTC features aimed at retail traders on June 27
Namibian University will offer master's degree in blockchain technology soon