SEC Commissioner: “DeFi projects have to address transparency and pseudonymity”

United States Securities and Exchange Commission Commissioner Caroline Crenshaw has highlighted the benefits of decentralized finance (DeFi) while warning of the dangers of failing to embrace a protective regulatory framework in a Tuesday opinion piece.

The article, “DeFi Risks, Regulations, and Opportunities,” is the first in the inaugural issue of “The International Journal of Blockchain Law.” In it, Crenshaw outlines her belief that the DeFi community must address issues with transparency and pseudonymity while coming into compliance with SEC rules:

“In the brave new DeFi world, to date there has not been broad adoption of regulatory frameworks that deliver important protections in other markets.”

Regarding what she sees as a lack of transparency, Crenshaw said DeFi lacks market protections, which “contributes to a two tier market in which professional investors and insiders reap outsized returns.”

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