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Wallstreetbets’ Denial of Hedge-Funding Hack Could Slow DeFi Boom

Last month’s market anarchy, where two-million-plus (at the time), day-trading individual investors unleashed the peer-to-peer power of social media to crush some of Wall Street’s top hedge funds, may indicate a coming use of existing legislative and regulatory methods to not only mitigate the ability of small investors to disrupt market, but, according to our research, spell increased regulations for the world of decentralized finance (DeFi).

The ‘wallstreetbets’ forums on Reddit and Discord allegedly sparked the madness as mostly young investors pumped share prices in companies hedge funds has shorted (like video game retailer GameStop) over 1,625% last month. Market mania swept online message boards, as GenY and Z traders piled into online brokerages like Robinhood and TD Ameritrade en masse to squeeze institutional short sellers like a vice.

This post dives deeper into this activity and also provides background on Ethereum, UniSwap, SushiSwap and other DeFi projects that any executive should be aware of.

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Tim Lloyd

Tim Lloyd

Tim Lloyd is a risk analyst and threat-finance reporter at Shadow Banker Media, where he is also the CEO. He was previously a financial advisor at Morgan Stanley. Now, he writes about the private fund industry, AML compliance, and cyber-threat intelligence. He has reported on issues such as FBI concerns over laundering risks in private equity and hedge funds and emerging cyber-enabled financial crime risks for Thomson Reuters Regulatory Intelligence, Vice Motherboard, and many other media outlets.