In a recent blog post, Andre Cronje, founder of the once-popular Yearn.Finance protocol, says that the cryptocurrency industry should be regulated as strictly as traditional finance.
This would ensure strong consumer protection while also opening access to much-needed remedies.
Cronje listed various types of safeguards that are available in traditional finance, which include central bank insurance and prudential supervision.
The founder has noted that cryptocurrencies are currently operating as banks. However, they don’t actually offer any safeguards, which emboldens irresponsible actors in the industry.
Speaking of the Terra crash, Cronje concluded that the actions of a few major UST holders were enough to destabilize the entire ecosystem.
At the same time, Cronje is convinced that Terra cannot be blamed for the crash in isolation, claiming that imprudent lenders have to take their share of responsibility.
When it comes to the downfall of Celsius, a prominent lending platform, Cronje attributes its demise to “poor decision-making by prominent actors” and a certain degree of malfeasance.
The Yearn.Finance founder believes that imposing prudential standards on the industry would be beneficial for crypto since it will lead to longer-term market stability. It would also provide consumers with “a clear avenue” for enforcing their rights.
Cronje, who used to be one of the most influential voices in decentralized finance, decided to quit crypto for good in early March together with his colleague Anton Nell.