DeFi is at a critical crossroads. Recently, the US administration took regulatory action against it. Provisions that could redefine the future of DeFi and financial self-management, according to some experts.
Aggressive regulation of DeFi in the United States
American regulators increased their offensives against the decentralized finance sector in April. These regulatory attacks have raised serious questions about the Biden administration's intentions regarding DeFi.
In this sense, Matthew Sigel, expert at VanEck, did not mince his words:
“The government is rushing to make DeFi functionally illegal before the next election. »
These regulatory offensives have manifested themselves in several controversial actions.
- First, the SEC issued a warning to the Uniswap Foundation by alleging that this DeFi platform operated an unregistered exchange.
- Next, the IRS proposed significantly expanding the definition of broker-dealers, essentially encompassing unhosted wallets used for personal custody.
- Finally, the SEC provided a warning letter to ConsenSys regarding MetaMask. This is one of the most popular decentralized wallets. This strong regulatory approach directly targets tools that allow users to own and control their cryptocurrencies.
A cooling of the crypto sector
According to Matthew Sigelthese regulatory actions have largely contributed to the cooling of enthusiasm investors for digital assets in April. In an already uncertain macroeconomic context, regulatory strengthening is destroying the confidence of traditional investors in the cryptocurrency sector.
Many experts are also concerned about the long-term consequences of this regulatory war against DeFi and self-management. By making these innovations quasi-illegal, the Biden administration could:
- slow down the adoption of cryptocurrencies,
- deprive the United States of a major competitive advantage in the race for financial innovation.
As political debate rages around the regulation of cryptocurrencies, the Biden administration is taking an aggressive approach against DeFi. By increasing the number of restrictive measures, American regulators are sowing doubt and confusion within this booming industry.
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