Trump's Crypto Advisor Warns of Expanding Crisis in DeFi Lending
According to Jinse Finance, David Bailey, cryptocurrency advisor to President Trump, highlighted a growing credit crisis in decentralized finance (DeFi) lending.
This crisis is intensifying into a broader cryptocurrency liquidity problem. Bailey emphasized that if margin calls cannot be met with the required collateral or if hedging strategies fail, the risks could quickly spread from DeFi to centralized finance (CeFi).
The second round (of crisis) may arrive on October 10. Hopefully, the situation will not escalate to this point, but caution is still necessary to avoid counterparty risk.
Market Movements and Economic Insights
- The JELLY token's market capitalization has plunged by 87% from its previous peak.
- The AIA token experienced a sharp surge of 800% before pulling back slightly.
- President Trump admitted for the first time that some tariffs are ultimately paid by American consumers and mentioned the possibility of launching a "Plan B" following a Supreme Court ruling.
- Australian ASIC Chair cautioned that a conservative approach to tokenization might cause missed opportunities.
- The European Union intends to delay the implementation of certain parts of the Artificial Intelligence Act.
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Author's summary: The credit issues in DeFi lending are evolving into a wider crypto liquidity crisis, with a significant risk of contagion to CeFi, urging vigilance against counterparty risks.