After the earthquake in the crypto market, which deepened with the collapse of TerraUSD (UST) and Terra (LUNA), the attention of states and surveillance agencies turned in this direction. The German finance watchdog BaFin has called for regulation of the decentralized finance (DeFi) industry, which includes altcoin projects such as Avalanche (AVAX), Unswap (UNI), Dai (DAI) and Chanlink (LINK).
BaFin: DeFi altcoin projects need regulatory framework
According to BaFin’s Birgit Rodolphe, while the DeFi industry is still relatively small, it has become a serious competitor to the traditional finance industry. may pose a serious threat to consumers. Birgit Rodolphe emphasized that DeFi cannot be placed in a better regulatory position compared to the traditional financial market.
As is known, there is no deposit protection for users if cryptocurrency assets suddenly disappear. This makes investors/users more and more vulnerable. Therefore, a specific regulatory framework is needed, according to BaFin.
Germany’s top financial regulator, BaFin, proposes a Europe-wide approach to regulating DeFi altcoin projects, not just limited to Germany.
The collapse of Anchor Protocol in the Terra ecosystem may also be a factor
Cryptokoin.com you’ve been following closely, believing that some of them are too big to fail. Terra (LUNA), which he believed in, collapsed with his entire ecosystem in a few days last week, leaving many users penniless.
Anchor Protocol, a popular savings, lending and borrowing platform based on the troubled blockchain, has collapsed with the wider ecosystem. Terra’s boom caused a severe market crash. Bitcoin (BTC), the largest cryptocurrency, has fallen to its lowest level since December 2020.
As it will be remembered, the European Parliament voted in favor of the Markets in Crypto Assets (MiCA) regulatory package in March. The ‘innovation friendly’ framework was passed from its text without some limitations regarding Bitcoin (BTC). This bill must go through a trial phase before it can be adopted as official law.
