Crypto Lending and Complaints of The SEC Curtailing Innovation

The recent $100 million settlement by BlockFi with the Securities and Exchange Commission (SEC) in mid-February – see press release and SEC order (PDF) – was hailed by some as welcome guidance by the SEC on cryptocurrency and a step forward for the blockchain industry.

In particular, the SEC required the registration of BlockFi’s crypto lending products as a security going forward – an expensive process that could overwhelm less well-capitalized decentralized finance (DeFi) companies.

BlockFi itself declared at the time, “We have worked tirelessly with regulators on your behalf to chart this exciting path forward, and we look forward to our next chapter of pioneering innovative, crypto-powered products for our clients worldwide.” And then, the company announced an SEC-compliant product, BlockFi Yield which replaced the previous BlockFi Interest Accounts which were offered in the U.S.

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Tokenization, Synthetics and the Stock Market Explored at SXSW

Cake DeFi

Are Synthetics a Fad or Breakthrough for Finance?” at SXSW, Cake Defi Founder and CEO Julian Hosp did his best to bring clarity to many of the late-breaking developments in tokenization models across decentralized finance (DeFi) for an eager SXSW audience.

Were some in the audience from the SEC? Hard to say – but given the questions during the Q&A, lawyers were most assuredly in attendance.  Today, the decentralized finance services of Singapore-based Cake Defi (offering staking, liquidity mining and lending) are available everywhere but the U.S., according to Hosp. Yet, he believes the positive implications of decentralized finance go far beyond today’s stock investors and includes the possibility of reaching a global population with limited access to funds and technology.

One other important underlying theme running throughout the hour-long presentation: decentralized finance is about creating tokens that are not a security with its incumbent regulatory framework. This is the hill that DeFi is trying to climb. Given Cake Defi’s recent announcement of its very own venture arm with $100 million of capital, the race is on to grow the space.

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