Shibtoshi, the founder of the Sixwap privacy trading platform, outlined a few fears that make institutions hesitate before adopting decentralized financial solutions (DEFI), including privacy, and the lack of normalized provisions on compliance and legal liability.
The founder of DEFI told Cointelegraph that the high transparency of transactions at Onchain is a problem for companies that must hide confidential information, including trade strategies, wages and business agreements. Shibtoshi said:
“The main fears-regulatory unrealisticness, privacy restrictions and the complex impressions of the user-real, but possible to solve. Innovations in the protocols that maintain privacy make them decide to decide with the needs of entrepreneurship. Platforms such as Silentswap are a step in this direction.”
Shibtoshi added that regulatory uncertainty is still one of the biggest problems for DEFI and is intensified by a fragmentary approach between legal jurisdictions, which prevents institutional acceptance.
“Is the default securities to the tokens? What happens if the decentralized autonomous organization (Dao) breaks down – and who is responsible when he does it? It is all quite unclear,” said the founder of Silentswap Cointelegraph.
Shibtoshi insisted on regulations on common sense, which encourage innovation and retain proposals for the values of decentralized finances, including self -esteem, speed and profitable transactions.
The total value blocked in the DEFI ecosystem has not yet returned to peak levels observed in 2021 and 2022. Source: Bronze
Related: DEX for specialized purposes prepared for growth in 2025 – the founder of the curve
The US Congress refutes the archaic DEFI principle, but DEFI is still threatened
Both chambers of the United States Congress have recently voted in favor of repealing the highly unpopular principle of the Defi broker requiring decentralized financial protocols and platforms to report clients’ transactions to the Internal Revenue Service (IRS).
The US Senate repealed the IRS broker principle in voting in 70 to 27 40 March, and then members of the Chamber of United States Representatives voting to repeal IRS rule on March 11.
Despite the repeal of archaic rule, excessive regulation can ultimately kill the sector, which was born as decentralized, more accessible and the nickname of the alternative to established finances.
According to the cryptocurrency entrepreneur and investor, Artema Tolkieva, regulatory compliance undermines decentralization in DEFI and destroys the proposal of the value of the emerging sector.
Tolkkiev wrote that the emphasis on regulatory compliance increases the potential of censorship and shifts control from users to intermediaries and gigantic institutions.
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