The United States Securities and Exchange Commission’s crackdown on crypto staking could have adverse effects on the decentralized finance sector. Jacob Blish, head of business development at Lido DAO, warns of potential harm and encourages the SEC to reconsider their approach for the good of the industry.
Blish told Bloomberg that the most significant risk would be if the SEC concludes that U.S. citizens can no longer interact with crypto-staking services and protocols. He believes that such a conclusion could restrict innovation and hurt the growth of the entire decentralized finance sector.
However, Blish fears that such a decision would force U.S.-based contributors to leave Lido DAO and find alternative work. Additionally, the Lido DAO manages the protocol’s governance “With members from various countries casting their votes on crucial decisions.”
Transparency Needed in Crypto Regulation
SEC lawsuits and enforcement actions against crypto firms have sparked concern. Blish adds his voice to the growing call for clarity in regulations and rules. Moreover, the aim is to establish a secure and transparent environment for crypto industry operations.
In addition, he said the lack of transparency as a U.S. citizen is the most disappointing aspect of the situation. The SEC recently charged Kraken exchange for failing to register their crypto-asset staking-as-a-service program. This has caused the deal to halt offering staking to U.S. customers.
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This action prompted Brian Armstrong, co-founder and CEO of Coinbase, to defend staking. However, he called it a “terrible path for the U.S.” if a staking ban were to occur. Armstrong expressed his concern for the future of the industry and the potential consequences of a staking ban on the growth and innovation in the crypto space.”
Coinbase’s chief legal officer, Paul Grewal, echoed Armstrong’s sentiment, calling for more precise rules for the crypto industry. Further, he said the public should not have to interpret complaints in federal court to understand what regulators expect.
This article conveys general information and the opinions expressed should not be considered personal advice for any individual or specific security or investment product.