Crypto CEOs briefed the regulator on important concerns affecting the market, such as attacks, decentralization, and digital identities, giving the US commodities regulator a crash lesson in decentralized finance (DeFi) in a March 22 meeting.
Ari Redbord, head of legal and government affairs at blockchain intelligence company TRM Labs, gave a brief introduction to DeFi and blockchain technology before the discussion began.
DeFi was “stress tested at FTX […] and did not fail,” according to Redbord, who underlined the amount of value that has been invested in it over the past two years.
According to him, blockchains’ transparency, immutability, and privacy could enable regulators to strike a compromise between the right to privacy and the requirement for security. He then listed the benefits that they are said to have.
In a collaborative analysis of the advantages and problems of decentralization, Redbord and Nikos Andrikogiannopoulos, the creator of the analytics company Metrika, came to the conclusion that the advantages “far outweigh” the problems, which they believe will “self-resolve.”
The founders of Fireblocks, Michael Shaulov, and Trail of Bits, Dan Guido, then gave a presentation on the market exploits and vulnerabilities that have occurred and are still occurring.
Guido stated that because hacks are so widely publicized, users and other companies frequently learn about them before crypto firms do. Guido claimed this creates a “demand for perfection” among crypto organizations.
The exploits against the Ronin Bridge, BadgerDAO, and most recently, the DeFi protocol Euler Finance were then briefly described and explained by Shaulov.
The formation of a subcommittee on digital assets and blockchain technology was approved by all participants in the DeFi section of the meeting.
The subcommittee will concentrate on the “why of DeFi,” what issues it addresses, and its applications, as well as flaws and suggested legislative and policy frameworks.
DeFi security concerns and Crypto solutions presented to CFTC
Members of the crypto community presented to the regulars during the Technology Advisory Committee (TAC) of the CFTC’s opening session in Washington, D.C., with the goal of addressing the major concerns now affecting DeFi.
In her prepared remarks, CFTC commissioner Christy Goldsmith Romero stated that “knowing how DeFi works” is “essential” because regulators and lawmakers are currently making “policy decisions connected to DeFi.”
According to DeFiLlama, DeFi’s Total Value Locked (TVL) is currently over $49.1 billion, up from about $15 billion at the start of January 2021.
Then, using the Ethereum Name Service and a MetaMask wallet as examples, Carole House, executive in residence of venture capital firm Terranet Ventures, and Jill Gunter, CSO of blockchain infrastructure company Espresso Systems, gave an overview of the current solutions for digital identity and non-custodial wallets.
Almost $2 billion was lost in 2022 as a result of the top 10 crypto attacks, and DeFi was the target of 113 of the 167 exploits that were used throughout the year.
Source: https://www.cryptopolitan.com/crypto-ceos-vs-regulators-on-defi-concerns/