Is the SEC Losing Its Grip on the Crypto Industry?
The departure of Andre Cronje, founder of Sonic, from the cryptocurrency industry in 2022 has raised questions about the United States Securities and Exchange Commission’s (SEC) influence in the space.
According to a recent blog post by Cronje, he cited pressure from the SEC as the primary reason for his decision to step away from public engagement with decentralized finance.
Cronje, renowned for launching Yearn Finance in 2020, stated that he took deliberate measures to avoid raising funds or selling tokens to avoid regulatory scrutiny. However, in 2021, he was contacted by the SEC, requesting information about Yearn Finance’s investors and profit distribution.
Despite not being a U.S. citizen and never conducting business in the country, Cronje complied with the SEC’s request, providing extensive details over several weeks. The ongoing investigation led to increased inquiries from the SEC, with a focus on whether Yearn Finance’s vaults qualified as investment vehicles, diverting Cronje’s attention from development work.
After enduring two years of relentless regulatory pressure and stress, Cronje made the difficult decision to step back from the industry. He clarified that his departure was not due to dissatisfaction with DeFi but rather the toll of constant regulatory scrutiny.
Behind the Scenes
Despite his public absence, Cronje continued to work on blockchain projects privately and is now on the brink of launching new DeFi initiatives. He mentioned feeling comfortable sharing his experience now, as recent changes in the SEC’s leadership have alleviated concerns about repercussions.
“Given the new direction of the SEC, I finally figured I can actually write about this, as previously I was strongly advised by those same investigators to not mention the investigation or it could escalate things,” Cronje explained.