Defi coins on coinbase1/7/2024 ![]() A Wells Notice is the official way a regulator tells a company that it intends to sue the company in court,” Paul Grewal, the company’s chief legal officer, wrote on the Coinbase blog on Sept. “Last Wednesday, after months of effort by Coinbase to engage productively, the SEC gave us what’s called a Wells Notice about our planned Coinbase Lend program. Securities and Exchange Commission was investigating Uniswap, Coinbase, the publicly traded crypto exchange that’s become a bellwether for the burgeoning industry, said it expected to be sued by the agency in connection with its forthcoming offering, Coinbase Lend. "Regulatory officials have made two things clear: they are supportive of the benefits that blockchain technology can confer on end-users, but they are not ready to trust the sector's ability to manage its financial-crime risks.Less than a week after news broke that the U.S. But some enforcement actions are already being taken," McDonell, who is now executive director of the Association of Certified Anti-Money Laundering Specialists, said. "While it's possible to read the tea leaves on the potential for regulatory action, what that response may entail in detail remains to be seen. "The lack of effective surveillance creates a substantial risk for fraud, money laundering, sanctions evasions and other criminal activity within these markets."Īs for what regulators will do in response, it's too early to say. "While DeFi protocols may offer similar functionality in financial transactions, they offer virtually none of the oversight that regulators require to ensure safe and efficient financial markets," Rick McDonell, former executive secretary of FATF, told CNBC. That means some founders of DeFi start-ups could potentially become subject to rules requiring that they provide information on originators and beneficiaries in the transfer of funds. Part of the rules call for countries to identify individuals with "control or sufficient influence" over DeFi programs. Last week, global anti-money laundering watchdog the Financial Action Task Force released revised guidance on cryptocurrencies. "We see some situations where the founding teams and developers that established the protocol have influence over the governance of the DeFi network." "How do you apply regulatory standards designed for centralized intermediaries to the world of a few marketplaces where there's no clear centralization?"Ĭarlisle said one source of concern for regulators is DeFi services marketing themselves as decentralized when that may not be the case. "One of the biggest questions facing regulators at the moment is how to deal with DeFi," David Carlisle, director of policy and regulatory affairs at crypto analytics firm Elliptic, told CNBC. Comptroller of the Currency Michael Hsu likened DeFi activity to controversial practices in Wall Street that led up to the 2008 financial crisis. Securities Exchange Commission was probing the decentralized crypto exchange Uniswap, with officials seeking information on how investors use the platform and the way in which it is marketed.Ī spokesperson for Uniswap Labs, which developed the service, told CNBC it is "committed to complying with the laws and regulations governing our industry and to providing information to regulators that will assist them with any inquiry." government called on Congress to introduce regulation for stablecoins, digital assets pegged to traditional currencies like the dollar to maintain a stable value.Įarlier this year, the Wall Street Journal reported that the U.S. Coinbase later dropped plans to launch the feature.Īnd just this week, a long-awaited report from the U.S. Securities and Exchange Commission over a planned interest-earning savings product, which the regulator felt looked too much like a security. Meanwhile, Coinbase in September got into a heated war of words with the U.S. Since it has no official headquarters, Binance has so far managed to avoid scrutiny - though the company says it now wants to be a friend, not foe, to regulators. Various countries have attempted to boot out Binance, the world's largest digital currency exchange, for operating without their authorization. Regulators have already started taking a tougher approach to the crypto industry.
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