Andre Cronje, founder of Yearn.Finance, Keep3r, and Solidly, said that the recent downturn in the crypto market has shown the need for regulation due to “irresponsible” companies.
Andre Cronje urged regulators to strengthen protection for users of crypto exchanges and DeFi platforms, citing asset recovery difficulties faced by users of the bankrupt company Celsius.
“Remedies under the current regulatory regime are ineffective. The policy of most crypto exchanges forces investors to give up rights to their assets. As a result of the platform’s bankruptcy, at best, they will be considered unsecured creditors,” he said.
Cronje believes that the crypto industry has an obligation to implement deposit insurance, prudential supervision and consumer protection measures to protect users. In this case, in case of bankruptcy of a cryptocompany, investors have “the opportunity to apply to the relevant prudential authority or to the court.
“Deposit insurance is a tool available to consumers in traditional banking that is not available to users of cryptocurrency exchanges,” Cronje said.
He stated that supervisors in the sector can increase the credibility of cryptocurrencies. Thus, central banks supervise private banks in relation to factors such as “capital, asset quality, sound management, profits, liquidity and risk sensitivity”.
Recall that earlier the founder and CEO of the FTX exchange, Sam Bankman-Fried, warned politicians against passing laws that could negatively affect decentralized finance.
Source: Bits
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