In the process of fighting with the SEC, Coinbase tried to find protection from US law, but was unsuccessful. However, another exchange, Swarm Markets, has been fortunate to receive support and satisfaction from German legislation. Swarm Markets pioneered the tokenization of Apple and Tesla shares.
In 2019, Swarm Markets co-founder Philipp Pieper reached out to financial regulators and asked them to monitor the exchange’s operations. It is worth noting that Pieper chose Germany to base his exchange, even though Germany is known for its strict financial rules.
Swarm Markets has asked the German Federal Financial Supervisory Authority (BaFin) to scrutinize their business model and provide an understanding of smart contracts and DeFi. The move caused shock and controversy in the crypto community, as a free exchange demanded government oversight.
Meanwhile, Coinbase has filed a lawsuit against the SEC after unsuccessful attempts to negotiate.
Swarm has become a notable name in the field of decentralized finance. They are a freelance platform that provides trading, custody and management services for cryptocurrency products.
This year, Swarm pioneered the offering of tokenized stock listings for Apple and Tesla, along with digital versions of two US Treasury ETFs. This marks an important step in moving closer to merging the traditional and crypto worlds.
Mr. Pieper argues that in the future, DeFi will completely eliminate the intervention of intermediaries. This can bring convenience and reduce costs to trading real assets like real estate, stocks, bonds, commodities, and art.
However, Mr. Pieper and Mr. Lehes, who have experience in the traditional financial sector, are well aware that achieving success is not easy, especially in terms of regulatory compliance. But it was a bold move with the determination to “win or lose”.
Currently, Swarm is still developing and has not achieved outstanding achievements. However, Mr. Pieper believes DeFi needs to adopt a degree of centralization. Contrary to the views of many in the crypto community, he thinks that centralized management can support DeFi’s core values.
Swarm remains self-monitoring, not attempting to apply a traditional market architecture to DeFi. They still believe in the self-monitoring, transparency and enforceability of smart contracts – the core elements that define DeFi.