Crypto Veteran Erik Voorhees Addresses US Lawmakers, Says Regulators Don’t Understand Decentralized Finance

Erik Voorhees thinks the high-profile collapse of the crypto change FTX additional demonstrates the virtues of decentralized finance (DeFi).

In a brand new weblog publish, the crypto veteran argues that DeFi has already solved “the issue of belief” in monetary markets.

“Isn’t that fantastic? With DeFi, monetary transactions are clear, not simply to authorities regulators, however clear for the complete public to see and be taught from (or is that not good when the general public can know issues, too?).

With DeFi, accounts are clear. Transfers are clear. Trades and even complicated monetary derivatives are clear. Balances are confirmed cryptographically. The code that executes these transactions is open-source, anybody can overview it or recommend modifications!”

Voorhees says the “opaque fraud” that introduced down FTX might by no means occur in DeFi. He additionally says decentralized finance is immune from the “re-hypothecation” that crashed embattled crypto lender Celsius Community this previous summer season, in addition to issues which have plagued conventional finance previously.

“The complicated derivatives and custody points which froze monetary flows in 2008, again when secure, regulated monetary establishments had no concept who owned what and markets collapsed underneath the layers of counterparty danger… these wouldn’t (cannot!) occur in DeFi.

And but what have many regulators carried out in response to this suite of miraculous expertise that was constructed by good, decided, principled engineers over the previous decade? Have they even discovered use it? What number of of these drafting crypto legal guidelines have ever truly executed a DeFi mortgage?”

Voorhees calls on regulators to pause and think about whether or not they truly perceive DeFi earlier than trying to control it.

“Sure, DeFi removes a few of your energy as regulators… nevertheless it solves the issues you’ve been attempting to control. Isn’t that extra vital?”

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