Decentralized finance developer Andre Cronje announced his departure from smartphone development in 2022 because of U.S. Securities and Exchange Commission (SEC) representatives pestering him.
The commission used threatening letters to present several legal obstacles which prevented him from continuing work within the DeFi sector.
Cronje says SEC letters drained his time and resources
Using the notion of launching Yearn Finance in 2020 Cronje later asserted he made no money from the project while retaining his tokens. In 2021 Cronje launched his second DeFi platform Keep3r which operated under similar financing principles. Yearn Finance’s launch in 2020 did not stop Securities and Exchange Commission (SEC) agents from sending a formal request to Cronje demanding financial records concerning the platform and its investment investors’ identities alongside all generated profits.
According to Cronje responding to the Commission’s inquiries required fourteen days of his time. The SEC subsequently issued supplementary letters to question his project development procedures. His search for legal support stretched his expenditures and stole additional time from him. Cronje pointed out his single conference visit to the United States where he functioned outside U.S. citizenship yet the SEC relentlessly pursued him.
He said each new letter introduced a different legal argument, requiring extensive documentation. The ongoing legal scrutiny left him with no choice but to halt his research and development efforts and focus entirely on responding to the SEC. After two years of continuous back-and-forth with the commission, he ultimately decided to step away from public DeFi projects.
Cronje continues DeFi work in private
Although he withdrew from public DeFi initiatives, Cronje continued researching trade finance and regulatory compliance. He dedicated his downtime to work on decentralized finance projects for private launch. The public withdrawal enabled him to conduct his work without outside restrictions.
Years went by without him sharing about his SEC experience but eventually he decided to reveal it. He reported that the commission had warned him before his public disclosure stating going public would magnify their legal pressure towards him.
Expect a more pro-crypto SEC with Gensler gone
Cronje believes that the SEC may adopt a more favorable stance toward cryptocurrency following the departure of former chair Gary Gensler. He suggested that the commission’s aggressive approach could shift with new leadership, making it less likely to target developers in the DeFi space.
Other figures in the crypto industry have also expressed relief over Gensler’s exit. Gemini co-founder Tyler Winklevoss openly criticized him, while billionaire entrepreneur Mark Cuban initially reacted with a post referencing the song “Hallelujah” before later deleting it. House Majority Whip Tom Emmer also voiced his disapproval of Gensler’s leadership.
Cronje now sees an opportunity to return to the DeFi sector under what he hopes will be a more balanced regulatory environment. He remains committed to developing new projects and believes the SEC’s approach will change with new leadership.