Hester Peirce Argues Against an Enforcement-Based Approach Towards Defi
Long-term crypto advocate and SEC commissioner Hester Peirce has remarked that the commission’s enforcement approach towards initial coin offerings isn’t right. Peirce made her remarks while participating in a June 23 virtual conference with the U.S. Securities regulator.
Peirce was quoted as saying, “I don’t want it to be an enforcement-based approach. A better alternative is to clarify all relevant issues regarding the Defi industry. There are clear cases, though. A platform that claims to be decentralized when it’s actually centralized should be subjected to securities policies.”
Defi’s Main Objectives
Cryptocurrencies have had it tough with securities laws with U.S. Securities regulations claim that these virtual assets should be classified as securities since a third party controls the value of these assets. One of Defi’s main objectives is to ensure no third-party involvement when dealing with exchanges.
However, most regulators are worried about the lack of intermediaries because they depend on them for report filing and, in worst-case scenarios, stand trials. But the main worry of regulators about Defi is identifying who they should prosecute when things go south. Peirce believes that this is a positive development. She opined that the “absence of third parties could lead to financial stability. Also, it ensures everyone can access financial services on clear terms, which is a positive development.”
Peirce also remarked that antitrust investigations result from incessant lawsuits on large FinTech companies who abused user data, with some embroiled in financial fraud cases. Peirce couldn’t proffer solutions to some issues when the committee asked her for the proper requirements to approve a bitcoin exchange-traded fund (ETF). She replied saying, “I simply do not know.”
Also, when the committee asked her whether she voted during the enforcement investigation involving ripple for selling XRP. She replied saying “nice try. The commission rules prevent me from providing any response till the case is over.”
But based on her general comments, she opposes the enforcement approach adopted by the regulatory body. “I have said it before, and I’m reiterating it. The majority of the commission’s request in court is about enforcing the law instead of being involved in constructive regulation.” Peirce concluded
Defi-Powered NFTs Heading Towards the Metaverse
In another development, Aavegotchi, a Defi and NFT crossover project, has revealed that it has published a Litepaper for its gamified metaverse, the “Gotchiverse.” There will be farmable fungible ERC-20 tokens (called Gotchus Alchemica) on this metaverse from the realm land plots.
Groups of players can socialize and combine their farming efforts using the Alchemica to develop their realm plots. While it can take some considerable blockchain blocks to complete the development (termed upgrades), Aavegotchi’s in-house automated market maker can hasten the process by providing liquidity.
Jesse Johnson, Aavegotchi’s co-founder, said it is uncertain when the full version of the Gotchiverse will be released, but part of it is scheduled for release in the third quarter of this year. He also said there are 21 full-time employees groomed already, including an experienced video game talent.
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