Andre Cronje, a prominent figure in the Defi room, attributed his departure from the sector in 2022 to legal challenges with the US Securities and Exchange Commission (SEC).
In a January 28th Blog postCronje has detailed how his legal obstacles with the financial regulator started in 2021 after he had launched KEEP3R, a Defi protocol designed to match organizations and other track providers with technical professionals.
Sec investigations
According to Cronje, the SEC initially sought information about an annual loss, a project that he launched in 2020. At the time, the financing of a year was a prominent Defi -credit aggregator that had attracted more than $ 6 billion at its peak in 2021.
Cronje stated that the SEC investigation was aimed at potential ties with fundraising and investor activities. However, he noted that the protocol ‘had not collected any money, did not sell tokens [and] Nothing that could be considered an infringement in the securities laws of all countries. “
He added:
“I have not earned any costs from the protocol, I had no founder, team or any allocation, there was no financial benefit of the protocol for myself.”
Nevertheless, Cronje spent weeks compiling the information requested by the SEC and often conducted research to find the necessary details.
According to him, he initially assumed that the provision of the requested information would close the case. However, additional correspondence of the regulator indicated a tone shift, which causes Cronje seeking legal assistance – a challenge considering his lack of resources and legal connections.
He continued:
“While the letters continued to flow, it changed from the raise ‘investigations’, and when it became clear that it was not an angle, it shifted to the focus on the annuals themselves as ‘investment vehicles’ because the vaults accept third -party deposits,” ” Works’ and then the deposits receive the benefit of ‘the work of others’. “
Cronje, a non-American citizen with limited ties with the markets of the country, expressed confusion about the scope of the research.
According to him, the SEC tests consumed considerable time and resources, which prevented his ability to concentrate on innovation. These requirements are intensified for more than two years, so that it completely leaves the Defi space to prevent further complications.
He wrote:
“After 2 years of having to deal with this every month, and endless sleepless nights and stress. I chose [to step away]. I am sure that many here would say that I should not have popped, but I also believe that someone who says he has never been in a position like this. You already receive the disadvantage, but nothing of the benefit. ‘
Why Cronje tells his story
Cronje explained that, according to the advice of regulatory advisers, he publicly took place during the investigation to publicly discuss the situation to aggravate his legal position.
Now he feels more comfortable to share his story, referring to what he sees as a change in the enforcement approach to the SEC under her current leadership.
Cronje’s revelation is not surprising, given the former chairman of the SEC, Gary Gensler, is a renowned crypto -skeptic who conducted considerable legal challenges against crypto companies. However, the current chief of the financial regulatory authority, Mark Uyeda, has shown more openness to the sector.
Cronje has since returned to the crypto-room as co-founder of Sonic Labs, the team behind Sonic, a powerful blockchain solution.
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