Recent regulatory actions in the DeFi ecosystem have received a positive reaction from credit rating company Moody’s. In recent developments, the Commodity Futures Trading Commission (CFTC) and the Securities Exchange Commission (SEC) have taken legal action against Mango Market exploiters for allegedly manipulating the market to steal funds from the platform.
Credit rating company Moody’s came forward and praised the actions of the regulators, saying it will lead to a safer atmosphere for the decentralized finance (DeFi) community.
Moody’s VP Believes DeFi Is No Longer Unregulated
Cristiano Ventricelli, VP of Moody’s Investors Service, wrote a note praising the SEC and CFTC for making the DeFi space “more transparent.” In detail, it stated that the enforcement action against Avraham Eisenberg, the exploiter of Mango Market, means that DeFi becomes a “safer environment.”
Moody’s executives believe that the two chief US regulators will take more action against bad players in DeFi, gradually leading to a safer ecosystem.
In the beginning tweet, Cristiano Ventricelli made similar comments. He noted the regulator’s actions could increase control of the DeFi sector. According to reports, regulation in the DeFi space has proven difficult for regulators due to uncertainty about their authority to oversee open-source crypto protocols.
In addition, the complexity of DeFi and crypto protocols has made it “almost impossible” for law enforcement agencies to understand how to monitor the sector.
For example, the SEC and CFTC have previously disagreed on jurisdictional oversight of crypto assets. Lately, however, both regulators have been working hard to increase their oversight of the industry.
For example, on January 20 and 9, the US Securities and Exchange Commission and The CFTC filed Charges against the Mango Market exploiter, Eisenberg, for manipulating the Mango Market.
In her new tweetsVentricelli suggested that a more secure DeFi environment could attract more institutional investors like banks and retail investors.
Mango Markets Hacker Faces Multiple Lawsuits From SEC, CFTC, And Mango Labs
Regarding the regulatory action, in a lawsuit filing, the CFTC accused Eisenberg of masterminding a manipulative scheme to manipulate the price of Mango Markets swaps. Meanwhile, the SEC Filing alleged that Eisenberg had a negative impact on the Mango Market platform.
Mango Labs, the project behind Mango Market, too file a lawsuit to Eisenberg on January 25. The company demanded that Eisenberg pay $47 million in compensation, including interest for activities on the platform in October 2022.
Last year, Mango Markets suffered an attack on swap deals that left the platform with a loss of $116 million. The hackers previously recovered $67 million in stolen funds but kept $47 million. Mango Labs is now demanding the remaining $47 million plus interest in damages.
according to reportThe Mango Markets DAO community voted 98%, equivalent to 291 million tokens, to the previous deal where the hackers could keep the balance of the stolen funds.
In addition, the public votes are shown that Mango Markets should drop the charges against the hackers, but the company is going ahead with the lawsuit.
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