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Mike Novogratz, CEO of Galaxy Investment, Criticizes Sen Elizabeth Warren for Going After DeFi Instead of Banks | CoinCodex

source-logo  coincodex.com 29 July 2021 09:50, UTC

Key takeaways:

  • Famous investor Michael Novogratz came after Elizabeth Warren on Twitter after she sent a letter to Treasury Secretary, calling for stricter regulations on DeFi
  • Novogratz pointed out that there would be no mortgage crisis if the banks were as transparent as DeFi protocols
  • The decentralized finance sector needs better know-your-customer (KYC) protections, says Novogratz

Former Democratic presidential candidate and senator from Massachusetts, Elizabeth Warren, recently classified decentralized finance (DeFi) as a “growing threat” to consumers and urged Treasury Secretary Janet Yellen to act and use her authority to more rigidly regulate the DeFi industry.

Famed billionaire investor Mike Novogratz blasts Warren for her anti-crypto stance

Following the letter sent by Warren to Yellen on Tuesday, famous Bitcoin supporter Mike Novogratz went on Twitter to voice his disagreement with the senator and expose her hypocrisy when it comes to regulating DeFi.

Banks charged 12 bn in overdraft fees, a fortune in atm fees, a fortune in checking account fees. But you keep going after crypto where saving and money transfer is a fraction of banks. Good job @SenWarren You really don’t seem so progressive to me.

— Mike Novogratz (@novogratz) July 28, 2021

In the following tweets, the prominent investor also added that DeFi protocols are in fact more transparent than banks. He supported his statement by saying that we would not have a mortgage crisis in 2018 if banks were as transparent about their business practices as the companies in the DeFi sector are.

The Great Recession that followed the bank’s actions, cost the US almost a million jobs and created a large gap between the real and potential GDP, since the American taxpayer was required the pay for the costs of reckless behavior from Wall Street. It could be argued that the effects of the financial crisis are felt to this day.

Novogratz is aware that changes are necessary, calls for improved better KYC protections

Despite criticizing Warren and standing in defense of the decentralized finance services, Novogratz used the opportunity during his Twitter exchange with the senator to point out the crucial component that is required to take the sector to the next level.

"We just need to solve for KYC [know-your-customer protections] which is coming. We need to educate our politicians." - Mike Novogratz, CEO of Galaxy Investment Partners

The cryptocurrency industry is slowly moving away from lax KYC requirements and heading towards more stringent customer protections. Following increased regulatory scrutiny, cryptocurrency exchange Binance recently reduced the withdrawal limit for accounts with only basic verification from 2 BTC to 0.06 BTC. BitMEX, the leading exchange for leverage trading of crypto assets also introduced a mandatory KYC policy in 2020.

coincodex.com