Andre Cronje, founder of the DeFi protocol, that cryptocurrencies need regulation

Andre Cronje, who founded the DeFi protocol and Yearn.Finance, shared his opinion on the regulation of the crypto assets sphere. In his opinion, digital assets should be subject to taxes and regulations just like conventional financial assets. In addition, the necessary innovations can give access to legal security to investors in bitcoin and altcoins.

Andre listed several types of guarantees that are already available in traditional finance, but not yet in the DeFi sector. These guarantees included central bank insurance and prudential supervision. Cronje noted that decentralized exchanges work similarly to conventional banks, except for the lack of guarantees and the encouragement of the irresponsibility of participants in the decentralized finance sphere, which allows them to scam investors and receive money in a dishonest way.

The founder of Yield.Finance could not help but recall the sudden debacle of Terra (LUNA), stating that a few Terra USD holders would be enough to negatively impact the decentralized finance industry. Andre Cronje believes that creditors should in such cases take responsibility for their actions and not forget about the risks in this area.

The founder of the decentralized finance protocol also explained the problems of the well-known Yield Farm platform Celsius. In his opinion, the site is going through hard times due to inadequate management. If you change the administration of the project, then Celsius will be able to show good progress and reach a new level for itself.

In order for the field of decentralized finance to reach the same level as classical financial assets, the management of the sites should think about compliance with prudential standards. The list of the latter includes critical values, the fulfillment of which ensures the sustainable operation of all banks in the world.

DeFi platforms should stabilize capital, improve liquidity, and carry out bailouts if needed. The establishment of certain laws in the field of DeFi would help to significantly improve the position of the decentralized finance sector and both raise the crypto industry to a new level and make the digital asset field a more stable place to trade.

In addition, if DeFi platforms have a single standard and legal regulations, this will significantly increase the level of confidence on the part of potential investors, which will help attract even more money into cryptocurrencies.