Prominent Wall Street financial institutions, including Citadel, SIFMA, and JPMorgan, met with the U.S. Securities and Exchange Commission’s (SEC) cryptocurrency task force on Tuesday to express their concerns regarding decentralized finance (DeFi). These firms voiced apprehensions about the SEC’s aggressive and supportive policies toward cryptocurrencies. DeFi is a financial system that decentralizes traditional banking and financial services through blockchain technology, with increasing use of cryptocurrencies. Its goal is to make financial services more transparent, accessible, and autonomous. However, with growing popularity, several legal and financial risks have emerged, including fraud, market volatility, and consumer protection issues. The major Wall Street players emphasized that SEC policies are creating market uncertainty, posing challenges for both investors and financial institutions. They fear that without an appropriate regulatory framework, the DeFi market could become unstable in the future. Over recent years, the SEC has intensified oversight and regulations in the cryptocurrency and DeFi sectors to ensure consumer protection and financial system integrity. Meanwhile, financial institutions and various parts of the crypto industry are seeking cooperation and a balanced approach to better regulate these innovative financial technologies. Potential changes in legal and financial regulations related to DeFi and cryptocurrencies are expected going forward, which could impact both the industry’s growth and associated risks.
Source: decrypt
