According to one of the world’s leading investment funds, Andressen Horowitz, we are experiencing the fourth wave of innovation in the crypto space. Each wave has strengthened the next, one of these indicators is the increase in money invested in companies in the sector and the attention it has received from regulators at the international level.
At the beginning of the “DeFi Summer” as the period of time where there was a boom in DeFi protocols was known, Andressen Horowitz, a fund that has invested in companies such as Skype, Instagram and Github among many other companies, announced that it would allocate in its second collection of the specialized fund “crypto 2” an amount of more than 515 million USD. He recently surprised the world with the announcement of the latest collection with an amount “Crypto3” focused on the sector of more than 2,000 Million USD.
The attention to the crypto space has not only been for experienced investors who usually see the future 10 years before, just ask 5 close people or friends of yours, have you ever heard of Bitcoin? and at least one person will answer you yes, this does not mean that those 5 people are using or have any interest in buying cryptocurrencies but they have at least heard the word “Bitcoin”. In the same way it has reached the ears of the regulators, the sound for them is less and less noise and it is clearer, the cryptocurrency revolution is inevitable and they have decided to fight.
On September 3, the DeFi ecosystem woke up with the news that the SEC, the regulatory entity in the USA, sought to regulate Uniswap Labs, according to the US newspaper WSJ, the entity that has made up the Uniswap Protocol development team. More than 386 Billion USD moved and 1.5 Million users. the platform of Decentralized exchnage is a great banner of Decentralized Finance, but is it possible to regulate Uniswap Labs?
The regulatory entity has a reputation for not commenting on or confirming pending investigations, according to the Uniswap team stated for the DeFiant portal: “We are committed to complying with the laws and regulations that govern our industry and providing information to regulators to assist them with any investigation.”
On September 1, the commission announced that it had filed an action against BitConnect, the famous 2017-2018 “Scam”, a cryptocurrency lending platform, making the argument that it defrauded investors with an unregistered offering of 2,000 million dollars. The SEC has emphasized that digital tokens as they call them are subject to the securities laws of the United States.
The SEC has been investigating the space for the past few months, asking investigative questions about the structure and mechanics of decentralized finance. SEC Chairman Gary Gensler has made clear that the agency plans to crack down on DeFi.
“Unlike traditional exchanges, such as the Frankfurt Stock Exchange, crypto platforms provide direct access to millions of investors. There is no middleman between the public and the platform,” Gensler told the European Parliament Committee on Economic and Monetary Affairs on September 1. “Therefore, in the absence of clear investor protection obligations on these platforms, the investing public is vulnerable. Unfortunately, this asset class has been plagued by fraud and scams.”
There is a distinction between the decentralized exchange and the company that writes its software. Uniswap Labs is the company that creates the graphical interface that allows users to interact with the smart contracts developed on the protocol to be able to exchange tokens.
Although the SEC will be able to limit the access of US citizens to the uniswap.org domain, any user could continue to interact with the protocol’s smart contracts with a wallet, but without a doubt any direct hit to the team members would be a reference for any member of the the community that wants to follow in the team’s footsteps.
Unlike Fintech startups that used the banking infrastructure and only changed the graphical interface and user experience in DeFi, the Layer or “layer” of infrastructure with which value, financial instruments and assets is created, managed, stored is completely decentralized .
Additionally, it is possible for anyone to take the source code as SushiSwap did in 2020 in order to create their own protocol and almost immediately obtain the liquidity of the protocol, so it would be very difficult for the US authorities to stop the flow of liquidity. of USD to this type of platform.
Without a doubt, 2022 will be a year of great challenges and one of the most important given the growth of the total MarketCap and the adoption of cryptocurrencies will be the measures taken by regulatory entities. There will be places in the world where the measures are very energetic and in some others like El Salvador where it could be encouraged even by the government.