Thursday, 30 November 2023

Crypto News

Impact of SEC’s proposed regulation DeFi on Uniswap, Maker, and Galaxy Fox

Impact of SEC’s proposed regulation DeFi on Uniswap, Maker, and Galaxy Fox

Decentralized Finance (DeFi) has emerged as one of the hottest sectors in crypto, attracting institutional investors. The likes of Uniswap, Maker, and Galaxy Fox have emerged as some of the best cryptos to invest in today. 

Amidst this growth, David Hirsch, the head of the Security and Exchange Commission’s (SEC) Crypto Assets and Cyber Unit has emphasized the agency’s commitment to regulating DeFi. How will SEC regulation affect these three booming DeFi protocols? 

How will Uniswap be affected by SEC’s proposed regulation?

Uniswap has solidified its position as the biggest decentralized exchange (DEX) in the crypto space. The SEC has gone after centralized exchanges (CEXs) like Binance and Coinbase. The regulatory agency has proposed to expand its reach and regulate the Uniswap exchanges like other CEXs.

The securities laws will then apply to Uniswap and other DEXs. However, industry experts have argued that the likes of Uniswap don’t have the centralized management systems to be regulated as a security exchange. While the Uniswap coin initially struggled because of regulation, it has seen some recovery. The problem remains, however, that (unlike Bitcoin, which is censorship-resistant), Uniswap relies on a website that could, theoretically, be shut down if the SEC decides to take action against it. This would have a disastrous effect on the value of $UNI, sending it into a sudden death spiral. 

For the moment, however, on the monthly Uniswap price chart, it has recorded a 25% increase. This has taken the price of Uniswap above the $5.20 level. If the bullish momentum is maintained, the price of Uniswap will look to break above resistance levels at $5.5 and $6.0. Changelly has predicted a rally above this level before the year ends.

How Maker will be affected by the proposed regulation

Maker is one of the oldest decentralized lending and borrowing platforms. Meanwhile, MKR is the main utility and governance token DAO governing the DeFi platform. Despite not offering exchange services, the proposed regulations would also mean that Maker is regulated as a security exchange.

However, the Maker coin has not been affected by this proposed regulation. Year to date, the Maker price has increased by more than 100%. As a result, MKR was ranked as one of the best crypto to invest in. However, in November the price of MKR dropped from…

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