Crypto Veteran Erik Voorhees Addresses US Lawmakers, Says Regulators Don’t Understand Decentralized Finance

Erik Voorhees thinks the high-profile collapse of the crypto alternate FTX additional demonstrates the virtues of decentralized finance (DeFi).

In a brand new weblog submit, the crypto veteran argues that DeFi has already solved “the issue of belief” in monetary markets.

“Isn’t that fantastic? With DeFi, monetary transactions are clear, not simply to authorities regulators, however clear for all the public to see and study from (or is that not good when the general public can know issues, too?).

With DeFi, accounts are clear. Transfers are clear. Trades and even advanced monetary derivatives are clear. Balances are confirmed cryptographically. The code that executes these transactions is open-source, anybody can evaluate it or recommend modifications!”

Voorhees says the “opaque fraud” that introduced down FTX may by no means occur in DeFi. He additionally says decentralized finance is immune from the “re-hypothecation” that crashed embattled crypto lender Celsius Community this previous summer time, in addition to issues which have plagued conventional finance previously.

“The advanced derivatives and custody points which froze monetary flows in 2008, again when secure, regulated monetary establishments had no concept who owned what and markets collapsed beneath the layers of counterparty danger… these wouldn’t (cannot!) occur in DeFi.

And but what have many regulators completed in response to this suite of miraculous know-how that was constructed by sensible, decided, principled engineers over the previous decade? Have they even discovered tips on how to use it? What number of of these drafting crypto legal guidelines have ever truly executed a DeFi mortgage?”

Voorhees calls on regulators to pause and contemplate whether or not they truly perceive DeFi earlier than trying to manage it.

“Sure, DeFi removes a few of your energy as regulators… however it solves the issues you’ve been making an attempt to manage. Isn’t that extra vital?”

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