The SEC and other national authorities outside the US have been cracking down on the Decentralized Finance community, as the crypto world knows. The excitement caused by DeFi has encouraged many people to get involved, and the Total Value Locked (TVL) has skyrocketed to more than $270 billion by mid-November 2021.
As the interest in crypto grows, unfortunately, so has the volume of crime and fraud. Innovation often outpaces regulation — this was confirmed in the 1990s when the internet boom began; and is once again seen in the age of crypto.
Gary Gensler and the US Securities and Exchange Commission (SEC) have been very vocal on crypto and DeFi, stating that
“the legislative priority should center on crypto trading, lending, and DeFi platforms. Regulators would benefit from additional plenary authority to write rules for and attach guardrails to crypto trading and lending.”
Recently, there has been an opening in Congress for the Commodity Futures Trading Commission (CFTC) to assert its jurisdiction over crypto products. Approximately 60% of the digital asset market could be classified as based on commodities, not securities under the Securities and Exchange (SEC) jurisdiction, so it is reasonable that the CFTC had the power to regulate crypto platforms centrally.
Many crypto trading platforms operating in the US are regulated at the state level, meaning they must secure money transmitter licenses in every active state.
This system has received criticism from industry advocates because of the added complexity needed to secure nearly 50 different permits to operate nationally.
At Astra, our vision is to push the decentralized finance market into gaining institutional adoption. We strongly believe that any regulation should have the goal of fulfilling the DeFi market potential and protecting all crypto users. The digital asset ecosystem must adapt to an evolving regulatory structure through private sector innovations, like Astra. Our unique decentralized compliance layer will ensure that all network participants adhere to the security regimes. If any rules are broken, the individuals and organizations responsible are accountable. Astra provides the security and trust to allow the meteoric rise of DeFi and cryptocurrency to continue.