Crypto Regulation Defi A Hard Nut To Crack Due To The Way It’s Structured Say SEC Commissioner

Regulation of has been the talk of the crypto space due to the volatility of the crypto assets and due to the collapse of FTX the issue has been revisited again which law makers are looking at where and how this can be possible. In a speech which was given by a pro bitcoin agitator Hester pierce has he says that Defi admittedly presents challenges to us regulators who are used to regulating companies, which are easy to cajole, monitor, and sue. Regulating people who write code is more difficult from a practical and legal perspective, including because it would impinge on free speech and would raise fairness issues since open-source coders cannot exercise control over how their code is used.

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Regulating individual DeFi users would be impractical. Requiring the front ends of DeFi protocols — essentially interfaces allowing users to easily interact with the base code — to register under the securities laws also would be problematic.

Attempts to force DeFi into a traditional regulatory framework likely would produce a system in which a few large companies operated registered DeFi front-ends. Sounds a lot like centralized finance.

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