In this “Financial Crime Matters” episode, Kieran Beer talks with Seoyoung Kim about the promise and possible perils of decentralized finance. Kim is associate professor of Finance and department chair at Santa Clara University.
They discuss the recent implosion of several cryptocurrency exchanges and stablecoin minters and the great legal and judicial debate now raging over the regulation of digital assets.
In detailing some of the regulatory definitional claims now being adjudicated in U.S. courts, Kim argues that the contested offerings are all analogous to financial instruments already regulated under the extant centralized finance system. As a result, she says that the proper application of rules from the centralized finance world are sufficient for oversight of decentralized finance (DeFi).
Kim adds that executing transactions on a publicly transparent blockchain, rather than on exchanges that facilitate money laundering and fraud via mixers and tumblers or privacy coins, is as essential as regulation to the ongoing integrity and promise of DeFI.
