The founder of the Decentralized Finance Protocol (DeFi) Yearn.Finance, Andre Cronje, reiterated that the cryptocurrency industry should be regulated as strictly as traditional finance. According to him, only this can provide reliable protection of consumers, as well as open access to the necessary means of legal security for investors.
Cronje listed various types of guarantees that are available in the traditional finance sector, including central bank insurance and prudential supervision. One of the main faces of the DeFi sector, noted: cryptocurrencies currently work as banks. At the same time, they do not offer any guarantees to customers, which encourages the irresponsibility of industry participants.
Cronje recalled the collapse of Terra (LUNA) and stated that the actions of several large holders of TerrsaUSD (UST) were quite enough to destabilize the entire ecosystem. Cronje expressed his conviction that careless creditors should also take their own responsibility for this incident.
As for the well-known Celsius DeFi platform, Cronje explained its problems with poor management. He noted that the introduction of prudential standards (laws established by the central bank and the state) in the industry would be beneficial for the development of the cryptocurrency sector.
In his opinion, this will be an important step towards the long-term stability of the market. The creation of a regulatory framework will provide consumers with reliable guarantees to protect their rights, which will significantly increase the level of trust in the entire virtual currency industry.
Andre Cronje, has already called for the regulation of the crypto market, which surprised the community. In April 2022, he published an entire essay on this topic, considering many cases of growth and decline of various assets in the industry.