Wed, September 18, 2024 at 23:33

• 

  Kang-hoon

  • Hello, Annie.

  • Today, I want to discuss a recent development involving the SEC and the DeFi platform, Rari Capital.

  • An ex-SEC official, Michael Liftik, has raised concerns about the regulatory body's approach to digital assets.

  • 
• Annie

  • Oh, interesting!

  • What exactly did Michael Liftik say?🤔

  
• 

  Kang-hoon

  • Liftik criticized the SEC for its reluctance to issue clear guidelines for digital assets while aggressively pursuing enforcement actions against firms in the sector.

  • He emphasized that this approach creates a challenging environment for companies trying to comply with evolving rules.

• Annie

  • That sounds quite problematic.

  • What was the issue with Rari Capital specifically?😮

  
• ADward

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• 

  Kang-hoon

  • Rari Capital faced accusations of misleading investors and engaging in unregistered broker activity.

  • Their Earn pools, which were marketed as being able to autonomously manage and rebalance investments, actually required manual intervention.

• Annie

  • So they weren't as autonomous as they claimed.

  • What about their Fuse pools?

  • Were there issues there too?

  
• 

  Kang-hoon

  • Yes, the SEC found that the co-founders of Rari Capital were involved in broker activities without proper registration.

  • At its peak, the platform held over $1 billion in assets.

• Annie

  • Wow, that's a lot of money!

  • Did Rari Capital admit to these charges?

  
• 

  Kang-hoon

  • No, they neither admitted nor denied the charges but agreed to cease breaking securities laws in the future.

  • This is a common practice in settlements to avoid prolonged legal battles.

• Annie

  • I see.

  • What about the hack incident in May 2022?

  • How did that affect Rari Capital?

  
• 

  Kang-hoon

  • The hack led to the theft of $80 million from their Fuse borrowing and lending platform.

  • 

  • This forced Rari Capital to halt new deposits and eventually shut down the platform.

  • The SEC acknowledged their cooperation in returning performance-based fees to affected users.

• Annie

  • That's a huge loss.

  • How is the current regulatory environment affecting the crypto industry overall?

  
• 

  Kang-hoon

  • The regulatory environment is quite contentious.

  • There's a growing divide in Congress over how to regulate the digital asset industry.

  • Some lawmakers view crypto as a partisan issue, which complicates the crafting of comprehensive legislation.

• Annie

  • It sounds like a tough situation for everyone involved.

  • Do you think this news is good or bad for the market?

  
• 

  Kang-hoon

  • I would say it's a negative development.

  • The lack of clear guidelines and the aggressive enforcement actions create uncertainty, which can stifle innovation and deter investment in the sector.

• Annie

  • That's unfortunate.

  • Thank you for explaining everything, Kang-hoon.🙏

  
• 

  Kang-hoon

  • You're welcome, Annie.

  • Always here to help you understand the complexities of the market.

  • Upon comprehensive consideration, this news is perceived as a 😱Bearish.