Comment by charles_kaw
3 years ago
Unfortunately, large defi institutions have been advertising to retail investors. Many of whom have not just had a haircut, but their whole head shaved.
Government regulation of retail finance is a feature, not a bug.
>Government regulation of retail finance is a feature, not a bug.
It's not a bug unless you believe adults should be treated like children and not be able to take the risks they desire or face the consequences of those risks. Anyone investing in DeFi should absolutely have known the risks; it doesn't justify giving the government even more power over people's finances.
Without regulation, financial systems follow a predictable boom/bust cycle, and in the "bust" phase, there's not much that any individual can do to avoid getting wiped out by cascades of counterparty default.
So, the only reasonable move for an individual is, simply don't participate in the system in the first place, keep your money in the mattress. (Crypto equivalent: hold your own coins).
The problem is, credit actually creates real economic growth. A society that encourages credit via regulation will outcompete a society that leaves it to an unregulated marketplace (and thus disincentivizes individuals from participating).
Go on reddit and you will see a lot of people who invested thousands or even hundreds of thousands of dollars in terra/luna, celsius, and various other crypto companies. There have been suicide help lines posted at the top of many of these forums.
Are these people adults? Yeah. Should they know better? Yeah.
The question is should we do anything about it? The Super Bowl is the most watched television event every year and there were lots of crypto ads this year. Do people need to be protected from themselves?
We have regulate the traditional financial industry. We put warnings labels on cigarettes. My view is that we need even more regulation of the traditional finance industry and apply those same regulations to crypto.
I definitely see where you're coming from regarding allowing adults to make their own mistakes, but that's the point of regulation. This isn't an entirely free market.
I've met enough people to be confident that adults should sometimes be treated like children.
In the end you both only get one vote.
What about driving licenses? Are you against those too? Is there any regulation at all that can't be criticised under the grounds that adults should not be treated like children?