Back to the list

Crypto Mom Hester Pierce of SEC Believes True Decentralization will Save Defi Projects

cryptoknowmics.com 06 August 2021 05:30, UTC

SEC Commissioner, Hester Pierce, well-known as Crypto Mom believes that the only hope for the founders of Defi is to bypass financial regulations to implement true decentralization from launch. She has reportedly warned of unrestrained “shadow-centralization” within the Defi sector.

SEC Commissioner Hester Pierce A.K.A. Crypto Mom Warns Defi Founders

The Commissioner of the Securities and Exchange Commission (SEC), Hester Pierce, also known as Crypto Mom in the crypto space spoke to Chris Blec, the Founder of DeFiWatch in an August 4 discussion streamed by The Defiant.

She noted in the discussion that decentralized finance and decentralized organizations are new concepts for regulators and said that:

“Having a peer-to-peer system that doesn’t have central intermediaries is very different from what we’re normally dealing with. If you want to be decentralized, you really need to be decentralized, and that is going to then put you in a different category from the perspective of regulators because that’s just not something that we’ve dealt with before.”

In addition to this, she addressed the future issues that can occur if Defi founders don’t build something that they are not ready to have regulatory implications on and said:

“If regulators can find a centralized part or group of people that they can grab hold of, they will grab hold of them. So I think it’s just good to be cautious about how you build things because, down the road, it could have regulatory implications.”

How to Develop Decentralized Protocols

Pierce was asked by Blec the best method for the development of decentralized protocols along with the doubt that if the founders should strive to acquire the same level of decentralization as Bitcoin.

In response to this, the SEC Commissioner said that the existing regulations are designed in such a way that any individual involved with the financial industry must come under one of the regulatory frameworks mentioned in the list of regulations. She said:

“If you want to make a case that you’re something different than the CeFi or TradFi system, then you have to show that you’re doing something radically different, which from my perspective, requires decentralization.”

cryptoknowmics.com