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Crypto Forensic Investigator Calls for Urgent Attention to DeFi Risks

source-logo  coinedition.com 28 November 2023 15:43, UTC

A Certified Cryptocurrency Forensic Investigator (CCFI), Kyla Curley, has recently highlighted a critical gap in the current regulatory frameworks concerning decentralized finance (DeFi). Curley commented on DeFi regulation in a recent interview with CNBC.

Specifically, Curley expressed concern about the lack of adequate regulation for DeFi. She emphasized that existing regulatory frameworks, both in the U.S. and globally, often fall short of addressing the unique challenges posed by decentralized finance.

She explained that DeFi enables users to engage in various financial transactions, such as lending, borrowing, and swap trades. She noted that the highlighted DeFi activities operate through smart contracts—self-executing codes that operate without human intervention.

According to Curley, the decentralized nature of DeFi presents a regulatory challenge. She emphasized that illegal activities within the DeFi space are on the rise, but the regulatory infrastructure struggles to keep up with the evolving landscape.

“That’s a place where it’s hard to regulate. It’s hard to figure out how to hold individuals accountable. What is the code, and who are you holding accountable?” Curley remarked during the interview.

Furthermore, Curley warned that the gap in understanding the risks associated with DeFi and the lack of adequate regulatory measures could significantly increase financial crimes within the space. As a result, she called for urgent attention to bridge this regulatory gap and develop strategies to hold individuals accountable for illicit activities in the decentralized finance industry.

On the other hand, Kyla Curley shared insights on the pending stablecoin bill and its potential impact on the crypto landscape. While noting that it is inherently uncertain to predict a bill’s approval within the complex politics of the U.S. Congress, Curley stressed that the bill is a significant step in the right direction for crypto regulation.

Meanwhile, a positive aspect of the bill that she appreciates is its attention to Proof of Reserve audits, as reserve audits are crucial for the stablecoin market.

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