The SEC under President Biden Warns DeFi Innovators to Steer Clear of Crypto Sector
Reports indicate that the Security and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) under President Biden have reportedly advised multiple DeFi innovators to refrain from any future involvement in the cryptocurrency industry.
Despite not being widely discussed, these directives were issued during the de-banking of crypto entities or what was referred to as ‘Operation ChokePoint 2.0,’ where founders were compelled to sign a non-disparagement agreement.
At the ETH Denver conference, Joey Krug, a crypto venture capitalist affiliated with Founders Fund, disclosed these developments.
Krug disclosed,
“Government officials approached DeFi innovators and coerced them into reaching settlements, often accompanied by agreements stipulating their permanent exit from the crypto space.”
Additionally, Krug mentioned that the innovators were bound by non-disparagement agreements permitting discussions on the subject matter solely with congressional members.
SEC’s Vigorous Actions in the Crypto Sphere: Impact of Crypto De-banking and More
To elaborate, crypto de-banking or the newer version of ‘Operation ChokePoint 2.0’ restricted cryptocurrency enterprises from availing banking services throughout the Biden administration.
Though inquiries are underway in Congress to investigate the extent of these actions, media coverage has largely ignored the cases of firms outrightly banned from the sector.
Krug highlighted that the relevant authorities resorted to threats of imprisonment against the innovators, without any violations of law or involvement of the Department of Justice (DoJ) in the matters.
“These regulatory bodies [CFTC, SEC] approached innovators, indicating that any dissent on their terms would result in imprisonment. While these bodies are civil agencies, none of these issues were referred to the DoJ.”
Krug suggested that Congress bring forth the affected parties for testimonies and remove any officials from the agencies associated with these allegations.
Nevertheless, Krug expressed optimism regarding the Trump-led SEC’s more favorable stance towards the industry, highlighting the agency’s move to reverse several regulations concerning enforcement against prominent crypto firms such as Coinbase, Gemini, and Uniswap.