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SEC Commissioner says, Defi Must Orate Translucency and Pseudonymity

source-logo  cryptoknowmics.com 10 November 2021 06:13, UTC
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SEC Commissioner, Caroline Crenshaw, demands Defi projects to associate with the SEC. It's mainly to hunt for solutions for accession with existing regulations.

Commissioner Crenshaw foregrounded the advantages of Decentralized Finance. In November 2021, she alerted the threats of failing to accept a protective regulatory framework. 

Defi Community to Accept SEC Rules

In an article published in "The International Journal of Blockchain Law", Crenshaw precis her belief which is, "It's high time DeFi community courtship issues with transparency and pseudonymity while coming into consent with SEC rules." 
The commissioner added, "In the audacious DeFi world, until now we've predominantly adopted the regulatory frameworks that remit protections in other markets."

Lack of Transparency has Sought for the Rules 

Crenshaw notices a lack of transparency and so she comments, "DeFi's shortage in market protections bestows a two-tier market in which both professional investors and insiders procure outsized returns."
She further argues, "Though the code for major DeFi projects is open source & all the transactions are recorded on-chain, retail investors are at a disadvantage to professional investors. Retail investors have the assets to execute audits on code and development teams."
According to her perspective, "It isn't practical to forge a demanding financial system that's sophisticated for investors and interpreters of complex code."

The connection between pseudonymity and market manipulation was also spotlighted by Crenshaw. When shareholders handle pseudonymously, she claimed the difficulty to track and diminish manipulation through the use of bots and collision trading. 

Caroline Crenshaw presumes DeFi projects to be an open discussion with the SEC. This will conduct search solutions to the plight of resolving how pseudonymity can meet the existing rules.

The DeFi space has historically touted the ability to remain pseudonymous as a feature, rather than a burden on participants. Crenshaw doesn't support the investors prioritizing it over making money. 

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