CFTC releases a report on DeFi, recommends certain actions from the government

[bbc.reporter]

The US commodities and futures trading commission has released a report where it describes that the problems in DeFi is in the absence of accountability and it recommends that the regulators work with DeFi development teams and take certain actions on digital identity.

It appears KYC will be coming soon to DeFi hehehee.



CFTC Commissioner Christy Goldsmith Romero, sponsor of the TAC, stated “From the time that I arrived at the CFTC, I have played a steady drumbeat that we need to study emerging issues related to digital assets or we could risk harmful unintended consequences.  This report is the result of the hard work of the TAC Digital Assets and Blockchain subcommittee to study DeFi.  It is intended to help inform ongoing policy debates in the U.S. Congress, state legislatures, and regulators including the CFTC.  It provides a foundational understanding of DeFi.  It finds that the benefits and risks of DeFi depend significantly on the design and features of specific DeFi systems.  However, most DeFi systems are not completely centralized or decentralized, but instead operate on a spectrum.

Source https://www.cftc.gov/PressRoom/SpeechesTestimony/romerostatement010824b

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[Fiatless]

The US commodities and futures trading commission has released a report where it describes that the problems in DeFi is in the absence of accountability and it recommends that the regulators work with DeFi development teams and take certain actions on digital identity.

It appears KYC will be coming soon to DeFi hehehee.

The government will not stop until they bring the crypto industry under strict control. This report is a step towards starting a discussion between regulators and key players in the industry on how to regulate the DeFi systems. This means we might start seeing debates in U.S. Congress, state legislatures, and regulators like the Commodity Futures Trading Commission on how to handle the so-called threat posed by DeFi systems. We just have to wait to see the outcome of these debates and discussions, however, this is not good news for those who cherish privacy.

[Yamane_Keto]

The growth of decentralized finance will be an obstacle for banks, especially if this financing develops into an alternative to central financing and the monetary policies pursued by the Federal Reserve, especially since DeFi projects are still resilient despite the difficulty of obtaining financing and high interest rates. Then these projects will be attractive, as happened in 2021, when interest rates were Close to zero.
DeFi is still in its infancy and has not developed sufficiently, and any event will lead to the CFTC trying to influence it or force them to impose a digital identity.

[zasad@]

To be honest, this is not exclusive. We've been talking about this for a long time, but there are a lot of projects in Defi, and it's impossible to control everything. Many projects do not operate in the United States and are not required to adopt their regulations.
They will try to control Ethereum by rejecting transactions from sanctions lists, but these measures are not enough.

[Yamane_Keto]

To be honest, this is not exclusive. We've been talking about this for a long time, but there are a lot of projects in Defi, and it's impossible to control everything. Many projects do not operate in the United States and are not required to adopt their regulations.

Defi is not as decentralized as it claims, and I believe that these services are open to digital identity, but they need to facilitate registration procedures and obtaining a license. If the government shows cooperation in the laws, I believe that Defi will be allowed in the United States, otherwise (which is most likely) they will be banned soon, especially since some of them are not. They are in line with the Federal Reserve’s financing policy and imposing profits on deposits.

[zasad@]

To be honest, this is not exclusive. We've been talking about this for a long time, but there are a lot of projects in Defi, and it's impossible to control everything. Many projects do not operate in the United States and are not required to adopt their regulations.

Defi is not as decentralized as it claims, and I believe that these services are open to digital identity, but they need to facilitate registration procedures and obtaining a license. If the government shows cooperation in the laws, I believe that Defi will be allowed in the United States, otherwise (which is most likely) they will be banned soon, especially since some of them are not. They are in line with the Federal Reserve’s financing policy and imposing profits on deposits.

In DeFi projects, user identification is impossible, but only a whitelist of addresses is possible. Perhaps there will be companies that will get licenses and solve this problem.
I haven't seen any direct bans on DeFi in the US yet, and their tax regulations are quite ready for DeFi, although it will be difficult for users to keep records.

[Yamane_Keto]

In DeFi projects, user identification is impossible, but only a whitelist of addresses is possible. Perhaps there will be companies that will get licenses and solve this problem.
I haven't seen any direct bans on DeFi in the US yet, and their tax regulations are quite ready for DeFi, although it will be difficult for users to keep records.

No, it is possible if we consider pancakeswap as an example of DeFi. The service is centralized because you need to visit https://pancakeswap.finance. They can collect information about your addresses, and block the swap until you create an account. Then they can request more data after creating this account as KYC. It is true that they will not They do this now because they do not want to lose their user base, but they can do it gradually, such as making the KYC feature only for some airdrops or for tax regulations.

Unless the service is self-hosted like Bisq then restrictions can be imposed on it.

[zasad@]

In DeFi projects, user identification is impossible, but only a whitelist of addresses is possible. Perhaps there will be companies that will get licenses and solve this problem.
I haven't seen any direct bans on DeFi in the US yet, and their tax regulations are quite ready for DeFi, although it will be difficult for users to keep records.

No, it is possible if we consider pancakeswap as an example of DeFi. The service is centralized because you need to visit https://pancakeswap.finance. They can collect information about your addresses, and block the swap until you create an account. Then they can request more data after creating this account as KYC. It is true that they will not They do this now because they do not want to lose their user base, but they can do it gradually, such as making the KYC feature only for some airdrops or for tax regulations.

Unless the service is self-hosted like Bisq then restrictions can be imposed on it.

I use this.
This is not a centralized service because they do not store my tokens. I can give them consent to dispose of my tokens and I can revoke that consent.
They can collect information about my IP and addresses, but the address information is available on the blockchain for everyone.
Perhaps they can block any address from using their service, but they cannot block tokens in the wallet.

If you have different information, then I want to see confirmation of it.

[avikz]

Yes! After cracking down on Bitcoin mixers, US regulatory agencies are now going after the decentralized exchanges. After all they want to stop all kind of cryptocurrency activities where KYC data is not required. So there's no surprise that CFTC has recommended certain actions against decentralized exchanges.

If there not able to effectively crack down on decentralized exchanges. They will start implementing punitive actions against the users. Mark my word. US government will go to any extent to stop Decentralized exchanges. What we are seeing is just the beginning.

[bbc.reporter]

To be honest, this is not exclusive. We've been talking about this for a long time, but there are a lot of projects in Defi, and it's impossible to control everything. Many projects do not operate in the United States and are not required to adopt their regulations.
They will try to control Ethereum by rejecting transactions from sanctions lists, but these measures are not enough.

The news update might not be a recent news development, however, as members of the cryptospace community and as users of defi, we should always give the effort of making everyone know what is happening around the cryptospace, to be skeptical and to tell everyone our own thoughts or speculations on these occurences.

In DeFi projects, user identification is impossible, but only a whitelist of addresses is possible. Perhaps there will be companies that will get licenses and solve this problem.
I haven't seen any direct bans on DeFi in the US yet, and their tax regulations are quite ready for DeFi, although it will be difficult for users to keep records.

No, it is possible if we consider pancakeswap as an example of DeFi. The service is centralized because you need to visit https://pancakeswap.finance. They can collect information about your addresses, and block the swap until you create an account. Then they can request more data after creating this account as KYC. It is true that they will not They do this now because they do not want to lose their user base, but they can do it gradually, such as making the KYC feature only for some airdrops or for tax regulations.

Unless the service is self-hosted like Bisq then restrictions can be imposed on it.

The frontend is centralized, however, the users can interact with their smart contracts directly through other methods very much similar to what occured with Tornado Cash.

[zasad@]

To be honest, this is not exclusive. We've been talking about this for a long time, but there are a lot of projects in Defi, and it's impossible to control everything. Many projects do not operate in the United States and are not required to adopt their regulations.
They will try to control Ethereum by rejecting transactions from sanctions lists, but these measures are not enough.

The news update might not be a recent news development, however, as members of the cryptospace community and as users of defi, we should always give the effort of making everyone know what is happening around the cryptospace, to be skeptical and to tell everyone our own thoughts or speculations on these occurences.

In DeFi projects, user identification is impossible, but only a whitelist of addresses is possible. Perhaps there will be companies that will get licenses and solve this problem.
I haven't seen any direct bans on DeFi in the US yet, and their tax regulations are quite ready for DeFi, although it will be difficult for users to keep records.

No, it is possible if we consider pancakeswap as an example of DeFi. The service is centralized because you need to visit https://pancakeswap.finance. They can collect information about your addresses, and block the swap until you create an account. Then they can request more data after creating this account as KYC. It is true that they will not They do this now because they do not want to lose their user base, but they can do it gradually, such as making the KYC feature only for some airdrops or for tax regulations.

Unless the service is self-hosted like Bisq then restrictions can be imposed on it.

The frontend is centralized, however, the users can interact with their smart contracts directly through other methods very much similar to what occured with Tornado Cash.

Swap in this application occurs instantly or there will be an error if liquidity is below a set level or there is not enough gas.
If you do not work with liquidity pools and only do swaps, then it is very difficult for you to lose access to the interface.
A centralized interface sounds fun. If the interface of a centralized exchange dies, the user will definitely not return the coin.

[bbc.reporter]

Very much to what has been speculated before by some people in the cryptospace, stablecoin issuers like Circle and Tether will become the governments shepherds to control how much inflows of fiat will he allowed in the cryptospace. This is the beginning.

On the government's mission to crackdown on DeFi, this should certainly be encouraged to cause the developers to create stronger infrastructure that would be more difficult to shut down hehehee. This is also only the beginning. DeFi will win.



Crypto critics often warn of digital currencies' potential to destabilize the U.S. dollar, but Federal Reserve Gov. Christopher Waller argued that stablecoins' dependence on the dollar could actually strengthen the U.S. fiat currency as decentralized finance (DeFi) catches on.

Read in full https://www.coindesk.com/policy/2024/02/15/us-federal-reserve-gov-waller-says-defi-could-boost-dollars-global-strength/

[zasad@]

Very much to what has been speculated before by some people in the cryptospace, stablecoin issuers like Circle and Tether will become the governments shepherds to control how much inflows of fiat will he allowed in the cryptospace. This is the beginning.

On the government's mission to crackdown on DeFi, this should certainly be encouraged to cause the developers to create stronger infrastructure that would be more difficult to shut down hehehee. This is also only the beginning. DeFi will win.



Crypto critics often warn of digital currencies' potential to destabilize the U.S. dollar, but Federal Reserve Gov. Christopher Waller argued that stablecoins' dependence on the dollar could actually strengthen the U.S. fiat currency as decentralized finance (DeFi) catches on.

Read in full https://www.coindesk.com/policy/2024/02/15/us-federal-reserve-gov-waller-says-defi-could-boost-dollars-global-strength/

I am sure that Circle and Tether are unnecessary players in the future market. These companies will gain huge capitalization, and then large criminal cases will be brought against them, ranging from minor financial fraud to the financing of terrorism. Their assets will be confiscated and the price of tokens will drop greatly. I think it’s too early to do such a maneuver.

Then the government will tell everyone that you are fools, and the agreement on the use of Tether says that they are not responsible if 1 Tether costs less than a dollar.

And then the era of cbdc will come.

[bbc.reporter]

@zasad@. I might agree that Tether can be taken down similar to the occurrence on how BUSD was taken down, however, I cannot agree on Circle. Circle is licensed in America and their headquarters are in Boston, Massachusetts. They are also backed by influencial institutional investors that would make Circle's success a certainty. They will lobby, bribe, do anything that they are capable to become the government's first choice stablecoin provider.

Also, the use of USDC does not make Circle a terrorist organization. Why do you argue about this? If a bank robber used a certain car to rob a bank, does this make the car company responsible for the bank robber?

[zasad@]

@zasad@. I might agree that Tether can be taken down similar to the occurrence on how BUSD was taken down, however, I cannot agree on Circle. Circle is licensed in America and their headquarters are in Boston, Massachusetts. They are also backed by influencial institutional investors that would make Circle's success a certainty. They will lobby, bribe, do anything that they are capable to become the government's first choice stablecoin provider.

Also, the use of USDC does not make Circle a terrorist organization. Why do you argue about this? If a bank robber used a certain car to rob a bank, does this make the car company responsible for the bank robber?

I wrote my thoughts in more detail in this post.
https://bitcointalk.org/index.php?topic=5482063.msg63702118#msg63702118

If I understood you correctly, then you do not argue with my opinion about Tether. I agree with you that the American company Circle has a better chance of remaining in the American market. But if the state decides to launch CBDC, then Circle will be superfluous in this market.