The former chief of staff of Securities and Exchange Commission (SEC), Amanda Fischer, attracted the anger of the cryptographic community after comparing the liquid milestone to factors that exacerbated the 2008 global financial crisis.
In a Tuesday press release, the SEC said that it did not consider certain liquid implementation activities as security offers and, as such, they do not come under the agency.
In an article on X, Fischer compared the liquid implementation activities to use by customer assets by the Lehman brothers as a guarantee for company transactions. The collapse of the investment bank was considered a culmination of the 2008 financial crisis.
“The last Crypto’s Crypto gift is to bless the same type of rechypothecation that has crushed the Lehman brothers – only in crypto, it’s worse because you can do it without any SEC or Fed surveillance,” said Fischer.
SEC Commissioner Caroline Crenshaw also criticized this decision on Tuesday. She said that the DEC Declaration is based on assumptions and does not give little regulatory clarity.
However, the SEC Commissioner, Hester Mr. Peirce, supported the agency’s decision. “Liquid clears is a new solution to an old problem,” Peirce said in an official dry statement. She compared the liquid milestone to a practice that improves the liquidity of fungible goods.
Fischer’s comment arouses the counterpoup
Fischer’s comment did not well know the cryptographic community, which largely considered the new SEC advice as a victory for decentralized finance and the adoption of institutional cryptography.
“First, you say that the dry is wounding crypto. Then you say that the crypto has no dry monitoring. What is? Matthew Sigel de Vaneck, said in an answer on X.
Fischer responded to Sigel, clarifying that the dry is of “blessing”, liquid puncture as being outside the scope of titles and is therefore not subject to his jurisdiction.
Mert Mumtaz, CEO of Helius Labs, compared the transparent decentralized nature of blockchains to the opaque banking system.
“You have no idea how LST actually work or are intentionally obtuse,” added Mumtaz.
Jason Gottlieb, a lawyer based in New York, said that Fischer’s comment was neither “technically nor legally”.
“If the rechyprothecation based on the blockchain was about 2008, we would not have had the problems we have made,” said Gottlieb.
Resurgence in TVL
Liquid ignition protocols currently have a total locked value (TVL) of $ 66.94 billion in all protocols, up 14.5% per year in the start. However, the TVL fell briefly below $ 30 billion in April, according to Defilma.
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Lido Finance is currently dominating the category with a market share of almost 48%. Its TVL amounts to $ 31.88 billion, down 1.5% for the start of the year.
Binance ETH ETH, the second largest liquid ignition service, experienced its TVL climb from almost 90% to $ 11.4 billion, compared to $ 6.05 billion at the start of the year.
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