Its bullshit that Securities Laws written in 1933 are being used to stifle DeFi and prevent people earning yield on assets. Laws framed a century ago have zero relevance in a fast changing DeFi / Fintech landscape

Coinbase cannot allow users to earn yield on stable-coins and other assets, because as per The Securities Act, 1933, any instrument that offers yield to its bearers is a security. And when an instrument or transaction gets tagged as a security transaction, it is no longer possible to simply deposit it, earn interest like we do now with DeFi, Celsius, BlockFi etc.. there are way more complex and expensive documentation and compliance requirements for securities.

But what is the fucking relevance of a 1933 law in 2021? DeFi only came into the picture couple of years ago, crypto as a whole has been around for only a decade or so. The government and regulators are still relying on the same financial laws framed when Prohibition was in effect, when Hitler was ruling Germany, and it took 3 days from USA to Europe via Zeppelins airships!

If crypto has to get a decent chance at adoption, these ancient laws must make way for more modern financial laws that take into account the pulse of modern times, the accessibility of information, ease of use of various platforms etc.

Right now the SEC says Coinbase cannot allow its users to earn yield, but very clearly the next in the line of attack will be DeFi protocols like Compound Finance, Aave etc. There is no way coded and automated DeFi protocols can keep up with the whims of regulators and compliance demands. DeFi Protocols are coded to be as efficient as possible, give traders the best trades at the lowest slippage. There is no way for Uniswap or Aave to handle securities reporting and compliance on chain. The only way for regulators would be to ban these DeFi native protocols.

Even staking, liquidity mining all of these crypto native transactions could be termed as securities transactions and banned for end users.

The whole spectrum of labelling transactions and assets as "securities" is just an effort to let the poor remain poor, while giving the rich a free hand to get more rich. For a large whale, the additional compliance costs in dealing with a securities transaction wont be much, but for a retail user, for earning 5% yield on stablecoins, if you had to deposit that with an authorised custodian, hold it in a street name, pay custodian premiums, file a bunch of forms.. all for a $50 return on $1000, odds are you are not gonna bother with all of this.