Although Mr. Kent’s lawsuit, supported by two plaintiffs’ law firms, is nominally focused on winning a potentially large pot of financial damages, it also appears to be a deliberate effort to put some of the DeFi community’s core doctrines to the test. A former technology lead for Sen. Elizabeth Warren’s 2020 presidential campaign, Mr. Kent is described in his lawsuit as someone “gravely concerned” at the prospect that cryptocurrency, which consumes voluminous amounts of electricity, could contribute to climate change, besides enabling bad actors to circumvent financial sanctions. The size of the DeFi market has grown precipitously in the last year, bringing closer attention from the U.S. Securities and Exchange Commission and other regulators. The total value of assets deposited as collateral on DeFi platforms climbed to more than $111 billion in November, up feverishly from about $10 billion at the beginning of 2020, according to DeFi Pulse.
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