The SEC and BlockFi reached an agreement, which enabled regulation. But it is also forcing other companies to re-evaluate the terms of their crypto loan offers. Following the settlement with rival BookFi Nexo stopped offering interest on new cryptocurrency deposits.
According to Mr. Khazaradze, the CEO from auroxdecentralized services like AAVE and Compound still provide attractive alternatives, but centralized companies will likely need to figure out how to legally register with authorities before offering crypto loans.
We can anticipate in the near future that centralized crypto lending companies will have to adjust their offerings in accordance with local market regulators. Any cryptocurrency business can provide such products as long as it adheres to current laws and regulations for lending and securities.
However, these companies risk having to deal with a regulatory approach that could jeopardize their operations.
Some Countries Are Ahead of Crypto Lending Regulation
While the United States consistently dominates global financial markets, authorities are lagging behind when it comes to regulating cryptocurrencies.
Some countries such as Singapore, Switzerland and the United Kingdom have implemented their own legislative framework for cryptocurrencies.
However, as the legislation varies from country to country, it remains complex for any company working on digital assets.
The Compliance Officer TrustToken, Teresa Anaya argued that since digital assets are decentralized and global in nature, a global standards agency should emerge in order to develop a risk assessment framework that any nation could adopt.
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