OKEx Financial Markets Director Lennix Lai believes that the regulation of decentralized finance will strengthen and lay the foundation for the further development of the industry.
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interview To DailyCoin, Lennix Lai shared his opinion on the possible impact of regulation on the DeFi industry. He believes that decentralized finance has already developed its own concept, as it has reached a large scale. By
data DeFi Llama, as of November 11, the total amount of crypto assets blocked in DeFi protocols exceeded $ 270 billion.
However, despite huge investments in this emerging industry, it faces stiff criticism from regulators who either completely prohibit any activity with cryptocurrencies or have difficulty developing clear regulations governing DeFi. Therefore, the future of this industry remains “blurred,” Lai said.
He disagrees with the opinion of many participants in the cryptocurrency market that, under the control of regulators, DeFi projects will lose their essence and cease to be decentralized, since they will have to limit some of the functions provided to users. On the contrary, Lai is convinced that by complying with regulatory requirements, DeFi projects will strengthen their position. He cited the example of Bitcoin, which is “gaining strength” every day due to a certain level of regulation, referring to the approval of the American regulator for the launch of ETFs on Bitcoin futures.
According to Lai, DeFi projects need to rethink KYC policies. The absence of intermediaries and low transaction costs do not eliminate the risks of money laundering using DeFi tokens, explained the director of financial markets at OKEx.
“Despite the unique value proposition of DeFi projects, they still need to fight money laundering and the use of cryptocurrencies in illegal activities. Therefore, it is perfectly normal for KYC and AML procedures to be integrated into the DeFi protocols. This will not change the benefits of using them, but it will make this industry stronger, ”Lai said.
Recently, SEC Commissioner Caroline Crenshaw expressed her willingness to engage with the DeFi industry to address transparency and anonymity concerns.
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