September 15, 2021 · 2 min read
The Regulators Are (Still) Coming
DeFi regulation is once again on the move. Last week, the SEC warned Coinbase of the legal implications of launching Lend - its product that would enable interest earning on digital asset lending. The NFT boom has also caught the eye of regulatory bodies and Gary Gensler has said that crypto trading will “not last long” outside of US regulatory framework - changes are likely coming.
Gary Gensler - Chairman of the US SEC
As Jason Tucker-Feltham states on this week’s episode of the Novum Insightful, financial regulation of traditional CeFi companies is typically defined by the state or national laws of the country in which they operate. DeFi regulation however is a very different beast. It would not be unthinkable for a DeFi company to be operating in hundreds of different jurisdictions simultaneously and as a result be subject to the rules of hundreds of financial bodies therein. It’s also quite possible for DeFi companies to operate outside of such regulatory parameters unintentionally and as it stands, the burden lies with the companies themselves to know and understand these laws and modify their operations to abide by them.
Jason is the founder and CEO of Venrai - a company that offers digital asset financial compliance consultancy to solve this problem. Additionally, Venrai will soon be making the OFAC sanctions list accessible to DeFi platforms:
“By bringing regulatory compliance data on-chain through the Venrai Chainlink node, smart contract verticals across DeFi will have access to critical information needed to operate in compliance with OFAC sanctions requirements. When accessing Venrai’s API, DeFi projects can avoid facilitating transactions involving OFAC-sanctioned digital asset addresses. Consequently, projects can reduce their own regulatory risk as well as combat illicit activity in the DeFi space.” - from Venrai’s website (https://venrai.com/ )