Key Points

  • Decentralized finance has seen a growth in market capitalization as harsh crypto regulation is happening globally.
  • Over the past two weeks, similar timing with Coinbase and Binance legal charges by SEC in the US, Decentralized Finance (DeFi) has increased market capitalization by over 15%.

DeFi has seen a market cap spike of 15% in the past two weeks as the US and other global regulators are going harder after crypto organizations. The market capitalization has increased by $6.3 billion in the time frame from $41.5 billion to $47.8 billion.

Crypto users to turn to Decentralized Finance (DeFi)?

As US regulators work to ‘protect’ citizens from risky crypto organizations, investors have taken a step back from centralized crypto organizations driving the numbers in the Decentralized Finance (DeFi) sector up. 

This June, the US Securities and Exchanges Commission (SEC) pressed charges against the two largest crypto exchanges in the country, Binance and Coinbase. It alleged that the two organizations were functioning as securities brokers in the country without its knowledge. As such, it wants them to cease operations to ‘protect’ citizens and/or stop offering certain services altogether.

The SEC alleges that the two exchanges have parallels with the fallen FTX crypto exchange, thus putting US citizens’ investments at risk. The exchanges have hit back with Coinbase planning an exit as Binance challenged the SEC to show that it has been mixing its Binance.US platform funds with its International platform and that it has spent customer deposits.

These allegations have come to the front as weak as the SEC has yet to prove that any exchanges are wrong. As such, crypto users have been calling for a US market exit as the country only accounts for 15% of the total global crypto remit. As such, a spike has been noticed in the DeFi markets, with Decentralized Exchanges like Uniswap and PancakeSwap experiencing a growing number of daily users.

Altogether, over $6 billion has been added to the DeFi markets capitalization in the two weeks, showing growing dissatisfaction with how the Centralized part of the crypto industry is regulated.

Keep watching Fintech Express for more updates on crypto and other Fintech-related developments.