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OKEx Insights Institutional investment NFT News of the Week DeFi

SEC chair mulls DeFi regulations, OpenSea trends on Google

2021.08.22 Rick Delaney

Gary Gensler believes DeFi protocols may fall under the SEC's oversight, particularly those with built-in incentive structures.

The always-on cryptocurrency industry rarely fails to deliver on the news front, and this week is no exception. United States Security and Exchange Commission Chairman Gary Gensler doubled down on comments made earlier this month regarding DeFi regulation, reasoning that many of the sector's protocols could fall under the agency's jurisdiction. Sticking with regulators, pressure appears to have forced Binance's hand this week, as the cryptocurrency exchange introduced mandatory KYC checks for all users. Elsewhere, Solana's SOL rallied to a new all-time high price of almost $80, and Google searches for the popular NFT marketplace OpenSea suggest that the market is still hungry for art, collectibles and other nonfungible digital assets. 

Here's everything you need to know about these stories, and more, in this week's edition of OKEx Insights' News of the Week.

Gensler eyes DeFi sector for SEC oversight

U.S. SEC Chairman Gary Gensler stated that certain decentralized finance protocols could fall under the regulatory body's remit. In an interview with the Wall Street Journal on Aug. 18, Gensler said that platforms rewarding participation with digital tokens often resemble entities already subject to SEC oversight. 

Key takeaways

  • Gensler said that those DeFi protocols led by a "core group of folks" with structures for "governance and fees" that benefit "promoters and sponsors in the middle" may violate existing U.S. securities laws. 
  • It is the second time this month that the SEC chair has publicly mulled DeFi regulation, having stated that "legislative priority should center on crypto trading, lending and DeFi platforms" on Aug. 3.

OpenSea trends on Google

Google search volume for the nonfungible token marketplace OpenSea hit an all-time high this week. Interest in NFTs has been rising once again after a lull earlier this summer. Hyped projects like the sci-fi trading-card game Parallel, various NFT avatar collections and a forthcoming Christie's auction of CryptoPunks, Meebits and the Bored Ape Yacht Club are behind the renewed speculation. 

Key takeaways

  • Google search volume for the term "OpenSea" hit two consecutive weekly all-time highs in August. 
  • China tops the rankings of interest by region, followed by Slovenia and St. Helena. 
  • OpenSea's seven-day trading volume for the last seven days was more than $384 million, according to figures from DappRadar.

Binance caves to regulatory pressure with KYC for all users

Amid heightened regulatory scrutiny, the global cryptocurrency exchange Binance will require all users to complete Intermediate Verification, effective immediately. The company announced the change on Aug. 20. Users failing to comply will have their accounts restricted from all platform features, excluding withdrawals. 

Key takeaways

  • In recent months, regulators in the U.K., U.S., Canada, Cayman Islands, Europe and Hong Kong have expressed concerns over Binance's operations. 
  • The new KYC policy follows the exchange announcing withdrawal limits of just 0.06 BTC per day for unverified accounts at the end of last month. 

Solana's SOL smashes previous all-time high

Following an impressive multi-week rally, the native currency of the Solana blockchain has hit a new all-time high. The SOL price rally began on July 21, trading at around $24, and peaked just below $80 on Aug. 18. Market observers, cited by The Block, claimed that institutional interest is responsible for much of the recent price runup.  

Key takeaways

  • SOL's price rally since July puts the cryptocurrency in the top 10 by market capitalization for the first time. 
  • Rich Rosenblum of digital asset market maker GSR told The Block that the volume of inflows into the ecosystem was indicative of "larger players" rather than retail. 
  • Solana-based projects are experiencing unprecedented demand, with the NFT collection Degenerate Ape Academy seeing a weekly trading volume of $6 million despite difficulties with its launch. 

Twitter acquires Zcash developer to decentralize social media

Twitter's decentralized social media project, Bluesky, has hired Jay Graber as its project lead. Graber, a software engineer who previously worked with Zcash and Skuchain, stated in an Aug. 16 Twitter thread that her priority was hiring a team. The social media company's CEO, Jack Dorsey, first announced the Bluesky initiative in December 2019. 

Key takeaways

  • Bluesky aims to return "control of the social experience to users," according to its website. 
  • Graber has been working with a group of engineers over the past year on the project. 
  • Bluesky is currently looking for team members, including a protocol developer and web developer.  

OKEx Insights presents market analyses, in-depth features and curated news from crypto professionals.

Follow OKEx Insights on Twitter and Telegram.

Disclaimer: This material should not be taken as the basis for making investment decisions, nor be construed as a recommendation to engage in investment transactions. Trading digital assets involve significant risk and can result in the loss of your invested capital. You should ensure that you fully understand the risk involved and take into consideration your level of experience, investment objectives and seek independent financial advice if necessary.

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