Yearn Finance Founder Andre Cronje Explains SEC Pressure and Decision to Step Back

Yearn Finance founder Andre Cronje said he left the crypto space due to intense scrutiny and inquiries from the U.S. Securities and Exchange Commission.

New SEC Approach Prompts Cronje to Speak Out

Andre Cronje, the founder of the decentralized finance (defi) platform Yearn Finance (YFI), said inquiries from the U.S. Securities and Exchange Commission (SEC) starting in 2021 were behind his apparent disappearance from this space. Cronje said the inquiries, which kept increasing, seemed to be intended to find an angle the SEC could use to raise securities law violations.

In a statement issued via Medium, the Yearn Finance founder suggested that recent changes in SEC personnel and direction prompted him to come out and explain the series of events that led him to step back. Following Donald Trump’s inauguration as U.S. president on Jan. 20, the SEC dispensed with some policies and rules established during the Biden administration.

Furthermore, there are ongoing rumors that the SEC, now led by Mark T. Uyeda, might drop charges against some digital asset companies like Ripple. In addition, Trump’s pro-crypto stance and his appointment of like-minded individuals have encouraged victims of the previous SEC leadership’s heavy-handed approach to speak out.

Explaining his ordeal, Cronje said the SEC initially sent him a letter requesting more information on the issuance of YFI tokens, which he provided. However, it was a second letter from the SEC, whose tone had changed, that prompted Cronje to seek legal counsel. He claimed that over time, the increase in the flow of letters eventually forced him to “completely stop development or R&D.”

Cronje Says He’s Ready to Release ‘New Primitives’

When the SEC ultimately shifted its focus to Yearn vaults, Cronje, a South African citizen, said he had to prove he was not receiving financial compensation for his role.

“At this point, I had to start proving I was not receiving any benefit, all benefits were being returned to the users, etc. All in all this took 2 years of my life and finally culminated in a point where I was essentially given a choice. I can keep trying to build things for free, receive no benefit, spend hours of my energy and time to release this code into the wild, while needing to constantly face these attacks and have to spend months of my life and real money to defend it. Or I need to step away,” the YFI founder said.

After spending years developing “new primitives” privately, Cronje said he is now ready to unveil them.

Meanwhile, the YFI founder points out that many people misunderstood his previous writings on crypto regulation. He said they saw the headline and assumed he had become a proponent of government intervention in the crypto space.

Cronje asserts that while he believes regulation of centralized entities within the crypto ecosystem is feasible, attempting to directly regulate decentralized protocols is both futile and detrimental to the industry’s growth.