SEC’s Crypto Mom has a warning for DeFi builders

SEC Crypto Task Force member Hester Peirce warned that onchain lending and vaults are subject to securities laws. In a Wednesday blog, she insisted that builders should focus on the function and design of their tools, rather than on how their tech shields them from the law.

She urged them to quit twisting and bending established laws just to carve out a special exception for their crypto activities. “You will have a painful fall,” she cautioned.

Peirce’s comments come as the SEC is re-imagining its approach to digital asset regulation. Last March, the agency issued guidance on the federal securities laws for protocol staking, airdrops, protocol mining, and wrapped crypto assets. The guidance also laid out a new taxonomy between digital securities and crypto assets that may not be securities.

Although the SEC has adopted a more collaborative tone toward the crypto industry under its current leadership, Peirce said compliance expectations remain intact on products that carry out regulated financial functions.

… Continue reading the full article at the original source below.