Despite opinions to the contrary, SEC’s actions today destroying staking on CeFi greatly harms crypto.

I get that this action is largely targeted at CeFi, but that is still very damaging to crypto.

The average American isn’t some tech nerd with a $2,000 gaming pc that loves to trade crypto. It’s cool if that’s you though. Think about the average 50 year old with a decent amount of net worth built up. That person is rarely going to be super tech savvy. They are going to want someone to manage their money for them like they do with their other brokerage accounts.

This is where CeFi comes in. As much as people like to crap on CeFi it will always be an essential part of crypto. Maybe one day in the year 2150 when the whole planet is crypto nerds that won’t be the case anymore. And I say that as a crypto nerd myself.

But taking staking away from Cefi takes away one of the lowest risk forms of yield. There are slashing penalties, but a large operation like Coinbase or other major exchanges could rather easily ensure that doesn’t happen and even offer slashing insurance to users in the rare case it does.

Taking staking away from CeFi is taking staking away from the average American. It’s blocking them from one of the lowest risk forms of yield.

Hopefully in the future this gets revisited or better yet proper legislation gets passed to properly regulate CeFi and give clarity to the space instead of Gary Gensler going on his power trip.

Cefi needs to exist to onboard new users. It needs to be strictly regulated too, but not completely screwed over like this current government seems intent on doing.