What CFTC Committee in Washington discussed about DeFi
2023.03.23 09:35
What CFTC Committee in Washington discussed about DeFi
By Ray Johnson
Budrigannews.com – On March 22, the commodities regulator in the United States was given a crash course in decentralized finance (DeFi). The regulator was briefed by executives in the crypto industry on important topics like exploits, decentralization, and digital identities.
Members of the cryptocurrency industry gave presentations to the regular audience as part of a scheduled first meeting of the CFTC’s Technology Advisory Committee (TAC) in Washington, D.C., with the intention of discussing important issues that are affecting DeFi at the moment.
Christy Goldsmith Romero, commissioner of the CFTC, gave a prepared speech to open the meeting, stating that “understanding how DeFi works” is “important” considering that “policy decisions related to DeFi” are currently being made by regulators and lawmakers.
It was a wonderful day to sponsor the CFTC Technology Advisory Committee. Master introductions on #DecentralizedFinance #CyberResilience #Cloud and #ArtificialIntelligence. All of the TAC members and presenters, as well as Committee Chair Carol House and Vice Chair @ARedbord, merit our sincere gratitude. — Commissioner Christy Goldsmith Romero (@CFTCcgr) March 23, 2023 Ari Redbord, head of legal and government affairs at blockchain intelligence firm TRM Labs, provided an introduction to the panel on DeFi and blockchain technology.
He talked about the benefits of blockchains—transparency, immutability, and privacy—and said that regulators might be able to strike a balance between the “right to privacy with the need for security.”
Redbord and Metrika founder Nikos Andrikogiannopoulos discussed the advantages and disadvantages of decentralization together. They came to the conclusion that the advantages “far outweigh” the disadvantages, which they believe will “self-resolve.”
Excited to attend the TAC meeting sponsored by @CFTCcgr Christy Goldsmith Romero, Chair Carole House, and Vice Chair Ari Redbord @trmlabs pic.twitter.com/QCXmpQ4cci “We have reached a point in time where we can no longer ignore decentralization,” Andrikogiannopoulos stated. We must not only embrace it, but I believe it is also our responsibility to guide it in the right direction.
Redbord emphasized the total value that had entered DeFi within the previous two years, claiming that it had been “stress tested during FTX […] and did not fail.” DeFi will always be around.
According to DefiLlama, DeFi’s total locked value is approximately $49.1 billion, up from approximately $15 billion at the beginning of January 2021.
Then, using the examples of the Ethereum Name Service and the MetaMask wallet, Carole House, executive in residence of venture firm Terranet Ventures, and Jill Gunter, chief strategy officer of blockchain infrastructure company Espresso Systems, provided an overview of the current solutions for digital identity and noncustodial wallets.
Dan Guido, the founder of Trail of Bits, and Michael Shaulov, the founder of Fireblocks, presented the market’s exploits and vulnerabilities.
Guido remarked, “All the hacks, they are extraordinarily public, and it’s usually your users and other outside firms that find out about them before you do,” instilling a “need for perfection” in crypto firms.
DeFi was the victim of 113 of the 167 exploits that were carried out throughout the year, which resulted in a loss of more than $2 billion for the top 10 crypto exploits alone in 2022.
The Ronin Bridge, BadgerDAO, and most recently the Euler Finance exploit were then briefly discussed by Shaulov.
The DeFi part of the gathering finished with individuals collectively deciding in favor of making a Computerized Resources and Blockchain Innovation Subcommittee.
The “why of DeFi,” the problems it solves, use cases, vulnerabilities, and proposed legal and policy frameworks will be the primary topics of discussion for the subcommittee.
