What if "De-Fi" platforms become regulated in the future?

[Jating]

What do you think the outcome of "De-Fi" regulation will be? Will governments be successful at the task like they did with ICOs? Or not? Your input will be greatly appreciated.

The governments or at least US SEC is not successful in regulating ICO in 2017 and they are late in filing cases and they are just ramping up their litigations this 2020. And besides they have Hester Peirce, which is a pro crypto, so I doubt that they will ran after this DEFI hype for now.

And what they are after right now is that those ICO who misinterpret their fund raising, they are after who run an security based on their definition. So unless they categorized DEFI as security then I doubt that they will go after it.

[dimonstration]

It will be extremely difficult to regulate DEFI but if they are successful I can see the market getting wiser, the thing they can do is to Geo-block some countries or regions but with the help of VPN this can be solved. I have a feeling this has come to stay just like Bittorrent

Governments have their own rules and regulations now and Financial Systems, I don't think they will plan to regulate DeFi to be adopted by the government, its still to volatile to do so, each country have their own security protocol even in Internet and have rules or laws regarding crypto implementation, some may open to the idea but many just want to stick in the old school system., it will be hard to regulate crypto or Defis especially if the company who built it is from different country.

[fammy]

Just like the ICO boom of 2017, the "De-Fi" space seems to be heading towards an ever-rising hype cycle. It shouldn't be long enough before scams start "kicking in", making governments regulate the space in their entirety. If they impose heavy-handed regulations like they did in ICO's early days, "De-Fi" might no longer be the same.  Imagine developers being held liable for creating and launching a "De-Fi" platform on the Blockchain. The growth of the industry will stifle because of fierce regulations from mainstream governments. After what happened with ICOs, new denominations have emerged (namely STOs and IEOs). These new kind of ICOs have built-in mechanisms to comply with government's regulations such as seizure of assets and more. Something similar might happen with "De-Fi" if governments decide to start cracking down on the entire industry.

What do you think the outcome of "De-Fi" regulation will be? Will governments be successful at the task like they did with ICOs? Or not? Your input will be greatly appreciated.

In my opinion it De-Fi platform cannot be ruled or cannot be regulated by any government knowing that this is decentralize and if that will happen government in every must first acknowledge all the crypto especially all those blockchain that uses De-Fi platform before the can or if they want to regulate it.

[judeafante]

What do you think the outcome of "De-Fi" regulation will be? Will governments be successful at the task like they did with ICOs? Or not? Your input will be greatly appreciated.

I want to see it regulated to avoid people from getting scam but I don't see how are they going to do that it's a smart contract-based platform which has truly decentralized features all interaction are without a third party, how can authorities regulate something where they have no way of disrupting all the transactions.

[lixer]

If something is truly decentralized, then it can’t be regulated. I am not into these DeFi craze, but if I’m right, that De' in the name stands decentralized, so the government doesn’t have the ability to regulate them when they are decentralized, unless they are some kind of centralized platforms and then will the government be able to lay it’s hands on it and put them under control. One thing with all these overhyped projects, they are not going to be there forever.

ICO is quite different from this one and even till now there are still projects that are still using ICOs. A lot of other new projects are jumping on the DeFi trend to launch their projects, but the question is how many of them will be around later?

[Abiky]

The governments or at least US SEC is not successful in regulating ICO in 2017 and they are late in filing cases and they are just ramping up their litigations this 2020. And besides they have Hester Peirce, which is a pro crypto, so I doubt that they will ran after this DEFI hype for now.

And what they are after right now is that those ICO who misinterpret their fund raising, they are after who run an security based on their definition. So unless they categorized DEFI as security then I doubt that they will go after it.

With governments capable of doing anything, I wouldn't be surprised if they ban people from using "De-Fi" services in the future. Or at least, they'll implement heavy-handed regulations that will stifle the growth of this emerging industry in the mainstream world. As far as securities go, I think that "Yield Farming" with their respective tokens qualify as a security. After all, people are investing in a platform's specific token to earn rewards in the long term. It's similar to earning dividends on the stock market. While it's hard to enforce regulations on "De-Fi" platforms, the government could easily hold developers accountable for their actions. They could fine the developers of such platforms by not complying with KYC/AML regulations or securities laws. There are so many ways that governments could put an end to scams in the "De-Fi" space limited to their own imagination.

Believe me, if "De-Fi" becomes regulated like ICOs, the growth of the industry will slowly decline. At least, you'll be able to access these platforms thanks to the decentralized nature of Blockchain technology. But things will not be easy, as governments will be on your tail following every action or move you make in the space. If you're a "De-Fi" platform developer and get caught, you can face fines or even jail time by not complying with fierce regulations imposed by the government. Consider what happened with EtherDelta's founder, and you'll see what I'm talking about. Just my thoughts

P.S. It seems that governments are concerned about the "De-Fi" craze. More info about that here: https://cointelegraph.com/news/regulatory-risks-grow-for-defi-as-a-money-laundering-haven

[hatshepsut93]

The growth of the industry will stifle because of fierce regulations from mainstream governments.

Is it really bad that the growth of industry which was 99% about scams was stifled? And even now, with IEO and other variants, all these offerings are still mostly scams, they just became a bit smarter and put more effort, so instead of exit scamming they fake some activity to not be too obvious. If DeFi will repeat the history of ICO, it's better for regulators to step in, so that less damage is done to crypto ecosystem.

[oscarftw]

What do you think the outcome of "De-Fi" regulation will be? Will governments be successful at the task like they did with ICOs? Or not? Your input will be greatly appreciated.

I want to see it regulated to avoid people from getting scam but I don't see how are they going to do that it's a smart contract-based platform which has truly decentralized features all interaction are without a third party, how can authorities regulate something where they have no way of disrupting all the transactions.

I don't believe the future government can control the DeFi feature. DeFi projects are going to the moon for its decentralization. Investors want freedom and privacy with their money. No third party is acceptable in this case. All governments want to control everything for taxes, some investors don't. Even though if take control than investor couldn't find any reason to invest.

[Abiky]

Is it really bad that the growth of industry which was 99% about scams was stifled? And even now, with IEO and other variants, all these offerings are still mostly scams, they just became a bit smarter and put more effort, so instead of exit scamming they fake some activity to not be too obvious. If DeFi will repeat the history of ICO, it's better for regulators to step in, so that less damage is done to crypto ecosystem.

While regulations promise to put an end to scams (or at least, stifle their growth), they certainly go against what crypto and Blockchain tech originally established. Adding regulators to the system, will be no different than traditional banking. This effectively brings back the middleman, making "De-Fi" utterly centralized. Inevitably, governments will regulate "De-Fi" just like they did with ICOs. In this case, they could hold developers liable for their actions. Governments could require developers to design "De-Fi" platforms that will comply with KYC/AML and securities laws. Those who're against this will face fines or jail time. It's unfortunate "De-Fi" will be heading towards this path, as governments always want a "piece of the pie".

Truly-decentralized "De-Fi" platforms might survive as long as developers protect their identities from government surveillance. An anonymous developer which creates a truly-decentralized (not hosted on centralized servers and trustless by design) "De-Fi" platform will render government's efforts in vain. We'll have to see what happens in the long run, as "De-Fi" continues to make strides in the mainstream world. Just my thoughts

[fortunecrypto]

What do you think the outcome of "De-Fi" regulation will be? Will governments be successful at the task like they did with ICOs? Or not? Your input will be greatly appreciated.

It's a smart contract-based,  

Smart contracts work on the “if this, then that” condition Whenever a certain condition is fulfilled, the smart contract will carry out the operation as programmed, it's programmable

I don't see where the government interference will come, they have to regulate and control the whole platform where the smart contract was created.

It's up to investors whether to trust the creator and the smart contract to proceed the execution.

[ampu]

DEFI in the future will be the mainstream, but there will be some changes.
The first is the decrease in annual profits from farming, and at a reasonable level.
Next, the majority of projects will use the funds they raise in pools to invest in real life.

[BayAngelo]

First, i will like to say that ICOs was never regulated and governments Never succeeded in regulating ICOS. rather what we have is individuals presenting a case about projects that conducted ICOS but failed to meet up with expectations. there are lot of projects out there that successfully scammed people and made away with their funds while some are been arrested depending on how the case is been raised.

Most ICO issues been reported and successfully resolved by the SEC are old projects. what about reccent projects that failed to conduct sales in USA and other E.U countries. were they regulated?

i don't think The defi sector will be regulated but will be controlled and monitored to avoid investors loosing huge funds but WILL NEVER BE regulated. it goes against the modalities of cryptocurrencies.

[plr]

The big question is how and who will regulate maybe Vitalik suddenly changes his mind and decides to impose his will and censor the smart contract, but that would ruin everything I don't think it can be regulated and there is no one can regulate it, we just shut out those who don't deserve to be part of the community, like exposing them.

[coin-investor]

I think if the blind DeFi craze continues like this, Governments would most probably try to regulate them as they did with the ICOs. As most of the DeFi projects work on a governance protocol, the Government can successfully regulate them by pressurising those who are capable of modifying the governance protocol which the DeFi projects rely on. 

I'd like to see that happen but the smart contract is made as no interference it is programmable code that cannot be altered once it is uploaded and it's for everyone to check the code they cannot alter the code they can just go to people who created that code but not the smart contract.

[amishmanish]

In these times of low economic activity, i think governments and countries prefer that people put money into some investments and move the money around. The De-Fi craze is doing exactly that. Earlier, you had to go through investment banks to move sums of money between corporations. Today, its happening on a massive scale with several small retail investors putting in money that leads to a much greater amount.
Uniswap had a volume greater than coinbase a few days ago. Think about it, Would the governments want to shut down such a movement of money or actually encourage it. The only thing going against DeFi is the propensity for scams. The only thing that can defeat it is itself. Otherwise, i feel the stage is set forthe established players to continue growing.

[Abiky]

First, i will like to say that ICOs was never regulated and governments Never succeeded in regulating ICOS. rather what we have is individuals presenting a case about projects that conducted ICOS but failed to meet up with expectations. there are lot of projects out there that successfully scammed people and made away with their funds while some are been arrested depending on how the case is been raised.

Most ICO issues been reported and successfully resolved by the SEC are old projects. what about reccent projects that failed to conduct sales in USA and other E.U countries. were they regulated?

i don't think The defi sector will be regulated but will be controlled and monitored to avoid investors loosing huge funds but WILL NEVER BE regulated. it goes against the modalities of cryptocurrencies.

Governments may not be able to enforce regulations on ICOs or "De-Fi" platforms. But they'll be able to pressure developers and ICO operators to comply with regulations or face serious consequences. ICO tokens and "De-Fi" platforms will still be able to live on the Blockchain, but their growth in the mainstream world will be diminished due to government pressure. While some say regulations are good for the industry to thrive, most crypto enthusiasts (like myself) don't see it that way. Regulations will bring back the middleman, something crypto and Blockchain tech was meant to avoid in the first place. The fact that most "De-Fi" platforms are scams, will leads us straight through this scenario (heavy-handed regulations).

In the bright side, truly decentralized "De-Fi" platforms will be able to survive in the long run. Centralized "De-Fi" platforms (not trustless) will eventually face government scrutiny. For us to distinguish decentralized "De-Fi" platforms from centralized ones, we need to analyze the smart contract's code. Only then, we can separate the good ones from the bad ones. No matter what governments' efforts may be, people can still participate in ICOs and "De-Fi" directly through the Blockchain instead of a website. That's the beauty of the decentralized and open source nature of crypto/Blockchain tech. Let's hope "De-Fi" becomes a serious alternative to traditional banking than just an idea in the not-so-distant future. Just my thoughts

[Rengga Jati]

The principle of DeFi is that it is unregulated, and this is what is of interest to most of the people involved in the crypto world. However, it does not rule out that DeFi will one day be regulated because of certain interests. And of course, this may violate the basic principles of DeFi.

well, the problem is I just read an interesting article on this subject.

"DeFi might soon have some regulatory issues," Fijolek told Cointelegraph in an interview. "The amount of funds that are flowing through DeFi is growing significantly."

But the next question is, who will provide the regulations? Will every country be concerned about this DeFi? because of course, DeFi will also affect various financial policies and financial systems of a country. especially if the project is successful in the country and the government does not like this.

Nobody can guarantee that DeFi will last longer in the crypto world before going to be replaced with other projects that are more interesting again. And we can't also trust too much on certain DeFi projects in a country.

Source:
https://cointelegraph.com/news/regulation-is-coming-to-defi-but-can-it-be-enforced

[Viscore]

I'm not sure if the government is true in this. They somehow rejected to regulate Bitcoin because people never wanted it also and could be the same as Defi. There is no way to stop these scams projects but just ourselves. We already know what is legit and what is pretending to be legit. If we can assess that thing and help spread awareness to the community, in that way we can minimize the rise of scam projects, and soon they will totally stop.

[chikator]

Just like the ICO boom of 2017, the "De-Fi" space seems to be heading towards an ever-rising hype cycle. It shouldn't be long enough before scams start "kicking in", making governments regulate the space in their entirety. If they impose heavy-handed regulations like they did in ICO's early days, "De-Fi" might no longer be the same.  Imagine developers being held liable for creating and launching a "De-Fi" platform on the Blockchain. The growth of the industry will stifle because of fierce regulations from mainstream governments. After what happened with ICOs, new denominations have emerged (namely STOs and IEOs). These new kind of ICOs have built-in mechanisms to comply with government's regulations such as seizure of assets and more. Something similar might happen with "De-Fi" if governments decide to start cracking down on the entire industry.

What do you think the outcome of "De-Fi" regulation will be? Will governments be successful at the task like they did with ICOs? Or not? Your input will be greatly appreciated.

When the time comes that the government would finally get a hold of DeFi or any other token, id say good bye to the massive trade returns. When tokens will be regulated the value would be much more stable and not volatile. Those lucky chances of gaining so much with little investment can say goodbye.

[Kong Hey Pakboy]

Just like the ICO boom of 2017, the "De-Fi" space seems to be heading towards an ever-rising hype cycle. It shouldn't be long enough before scams start "kicking in", making governments regulate the space in their entirety. If they impose heavy-handed regulations like they did in ICO's early days, "De-Fi" might no longer be the same.  Imagine developers being held liable for creating and launching a "De-Fi" platform on the Blockchain. The growth of the industry will stifle because of fierce regulations from mainstream governments. After what happened with ICOs, new denominations have emerged (namely STOs and IEOs). These new kind of ICOs have built-in mechanisms to comply with government's regulations such as seizure of assets and more. Something similar might happen with "De-Fi" if governments decide to start cracking down on the entire industry.

What do you think the outcome of "De-Fi" regulation will be? Will governments be successful at the task like they did with ICOs? Or not? Your input will be greatly appreciated.

When the time comes that the government would finally get a hold of DeFi or any other token, id say good bye to the massive trade returns. When tokens will be regulated the value would be much more stable and not volatile. Those lucky chances of gaining so much with little investment can say goodbye.

Indeed. If DeFi platforms become regulated by the government, they will be able to manipulate or control DeFi, and it's tokens. So its value will definitely become stable and not volatile that it is not worth for investment because you won't gain good profit from it. But I don't think governments will regulate DeFi platforms because many people still don't accept cryptocurrency due to fraudulent activities.