SEC's Pressure Drives Yearn Finance Founder Out of DeFi

Andre Cronje, the founder of Yearn Finance, has revealed that intense pressure from the U.S. Securities and Exchange Commission (SEC) led to his departure from the decentralized finance (DeFi) space in 2022. In a detailed blog post published on January 28, 2025, Cronje shared his experience of facing persistent regulatory scrutiny that spanned two years.

The SEC’s investigation began in 2021 following Cronje’s launch of Keep3r, a protocol designed to connect organizations with technical professionals. However, the regulator’s primary focus quickly shifted to Yearn Finance, a DeFi lending platform that had accumulated over $6 billion in user deposits at its peak in 2021.

Initially, the SEC sought information about potential fundraising activities and investor involvement with Yearn Finance. Cronje maintained that the protocol had never conducted token sales or fundraising rounds, stating explicitly that there were no activities that could have violated securities laws in any jurisdiction.

The founder emphasized his lack of personal financial gain from the project, pointing out that he received no fees from the protocol and held no founder or team token allocations. Despite this, Cronje found himself spending weeks gathering and compiling information to respond to the SEC’s inquiries.

What started as simple information requests soon evolved into more complex investigations. The SEC’s focus shifted to examining Yearn vaults themselves as potential investment vehicles, questioning whether they fell under securities regulations because they accepted third-party deposits and provided returns based on “the work of others.”

The mounting legal pressure created particular challenges for Cronje, who as a non-U.S. citizen had limited connections to American markets. He faced difficulties securing legal representation while lacking both resources and established legal networks.

Throughout the investigation, Cronje devoted substantial time to addressing the SEC’s ongoing inquiries, which arrived monthly. This constant demand for attention and documentation severely hampered his ability to focus on technical innovation and development.

The investigation’s scope continued to expand over time, requiring Cronje to prove he wasn’t receiving any personal benefits from the protocol. He had to demonstrate that all benefits were being returned to users, a process that consumed additional time and resources.

After two years of monthly correspondence and legal demands, Cronje made the decision to step away from the DeFi space entirely. He described facing a choice between continuing to build products without compensation while dealing with regulatory challenges