Andre Cronje, the creator of Sonic, revealed that pressure from the United States Securities and Exchange Commission triggered his sudden exit from the cryptocurrency sector in 2022.
In a recent blog entry, Cronje shared his prolonged conflict with the regulator, which ultimately compelled him to withdraw from public involvement in decentralized finance.
Cronje, renowned for the launch of Yearn Finance in 2020, mentioned that he intentionally refrained from fundraising or token sales to avoid regulatory examination. However, in 2021, he faced his first inquiry from the Securities and Exchange Commission, requesting information regarding Yearn Finance’s investors and the distribution of profits.
Although he was not a United States citizen and had never conducted business within the nation, he complied with the inquiry, spending several weeks compiling comprehensive data.
The SEC pursued its investigation further, dispatching additional letters that Cronje characterized as increasingly confrontational. Gradually, the inquiry changed focus from a supposed securities infraction to probing whether Yearn Finance’s vaults constituted investment vehicles. These inquiries, he noted, drained his time and resources, prompting him to cease development efforts.
“After two years of dealing with this every month, and countless sleepless nights and stress,” Cronje stated that he decided to step back.
He clarified that his exit wasn’t due to any discontent with DeFi, but rather the burden of persistent regulatory oversight.
Behind the scenes
Even though he has retreated from the public spotlight, Cronje has been diligently working on blockchain projects in the background. He now claims he is on the verge of unveiling new DeFi initiatives.
He also mentioned that recent changes in the SEC’s leadership gave him the confidence to share his experience, as past investigators had cautioned him against speaking out.
“With the new direction of the SEC, I finally realized I could write about this, as I had been strongly advised by those same investigators to avoid mentioning the investigation or it could escalate matters,” Cronje wrote.
