SEC’s crypto staking crackdown has uncertain consequences for DeFi: Lido Finance
The U.S. securities regulator’s crackdown on cryptocurrency staking could have unintended consequences for decentralized finance (DeFi), according to Lido DAO’s head of business development.
In Bloomberg on February 13 report Jacob Blish, who leads business development at decentralized autonomous organization Lido (DAO), said the most significant risk would be if the SEC ultimately concluded that no U.S. citizen could interact with crypto staking services, including protocols.
“The biggest risk I personally see as a US resident is that they will come along and say that you can no longer even interact with or contribute to these types of protocols.”
“Then I, as a DAO member, does that mean I can no longer work on Lido? Should I leave and do something else?” Blish added.
The management of Lido is administered by the Lido DAO, whose members from all over the world vote on the important decisions that determine the protocol.
After the SEC filed lawsuits and other enforcement actions against crypto firms, Blish joined a growing number of people in the crypto industry calling for more transparency about rules and regulations going forward, stating:
“The most frustrating thing is that we as an industry are constantly asked for transparency, but then I, a US citizen, do not receive any transparency and how [regulator’s] decision-making process is underway.
On February 9, the SEC charged crypto exchange Kraken with “failing to register the offer and sale of its cryptoasset staking program as a service,” prompting the exchange to stop offering staking to its U.S. customers.
I sincerely hope that someone will prove in court that there is a legal and convenient version of custodial staking that can be offered to US consumers. It will be a fierce, long, expensive battle and a huge distraction, but the industry and the US will be extremely grateful. https://t.co/lhZPxykznD
— Jesse Powell (@jespow) February 9, 2023
In the latest SEC action, Coinbase co-founder and CEO Brian Armstrong defended staking in a February 9 tweet, saying it would be “a terrible path for the US” if a staking ban occurs.
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Paul Grewal, Coinbase General Counsel, relied on Armstrong’s Feb. 10 tweets. asking for clearer rules for the industry.
“The public doesn’t have to go through complaints in federal court to understand what the regulator expects,” Grewal said.
Credit : cointelegraph.com