March 22, 2023

DeFi Innovation Is Moving Offshore Because of US Regulatory Severity, Says Voltz Labs CEO

The decentralized finance (DeFi) industry is rapidly growing, but it seems that the United States is not the best place for it to flourish. According to Simon Jones, the Co-founder and CEO of Voltz Labs, the unfriendly regulatory environment in the US is pushing DeFi innovation offshore.

In an interview with Decrypt’s Jason Nelson at ETH Denver, Jones discussed the potential of using DeFi for interest rate swaps and the “cartoonishly large” market opportunity for DeFi. However, he also highlighted the challenges that DeFi faces in the US due to regulatory severity.

Jones stated that the US regulatory environment is “not conducive to innovation,” and that emerging economies are becoming crypto hubs because they are more open to experimentation. He added that the US needs to “get its act together” if it wants to remain a leader in the DeFi space.

Jones’ comments come at a time when the US Securities and Exchange Commission (SEC) is cracking down on DeFi projects. The SEC has recently filed a lawsuit against Ripple, alleging that the company’s XRP token is a security and that Ripple conducted an unregistered securities offering.

The regulatory uncertainty in the US has led some DeFi projects to move offshore. For example, Uniswap, one of the largest decentralized exchanges, recently announced that it is moving its operations to the Cayman Islands.

Despite the challenges, Jones remains optimistic about the future of DeFi. He believes that DeFi has the potential to disrupt traditional finance and that it will continue to grow in popularity.

“DeFi is going to be a massive industry,” Jones said. “It’s going to be bigger than traditional finance, and it’s going to be more accessible to people all around the world.”

As DeFi continues to gain traction, it remains to be seen how regulators will respond. However, it is clear that the industry is not waiting for the US to catch up, and is instead moving offshore to more welcoming jurisdictions.

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