Algorand’s DeFi-focused cryptocurrency platform Algofi has decided to shut down, citing harsh regulatory actions by the US.
Algorand’s largest DeFi cryptocurrency platform ends operations
According to the announcement dated July 10, Algofi will terminate its activities as current events make its ongoing activities impractical. The Algofi team reported that the protocol will be set to “withdrawal only mode” in the coming period. However, all social media accounts of the project, except Discord, will also be closed. Users will be able to continue to communicate with the Algofi team via Discord.
In the raid statement, statements such as “We have some unfortunate news to share regarding the Algofi protocol… After much thought, the team made the unfortunate decision to liquidate the protocol… However, we believe that we will no longer be able to provide the necessary support to maintain the protocol at the high standards that we believe the community deserves.” took place.
Algofi is a lending protocol based on Algorand that allows users to earn interest with ALGO. Since the beginning of the year, many competitors have outstripped DeFi platforms. His TVL hit over $120 million in February. However, it’s currently down to $33.03 million, according to DeFillama data.
Algofi decision hits Algorand’s TVL
After Algofi’s announcement, Algorand’s TVL dropped more than 3%. TVL is currently at $59.84 million. The latest drop made Algorand the second biggest loser of the day in terms of TVL, according to DeFillama data.
Meanwhile, the decline in the Algorand ecosystem has continued since April, when the SEC classified the cryptocurrency as a security. The Algorand team appealed against this decision of the SEC in the following months. cryptocoin.com As we have reported, along with ALGO, 5 more altcoins were classified as securities on this date.
ALGO price enters a downtrend after SEC cryptocurrency lawsuits
The ALGO price has been falling since the SEC lawsuit that surfaced on April 17. On this date, the intraday dropped 10.42%. The US regulator claims that ALGO is a security because token investors have a reasonable expectation of profit based on the efforts of others. Alongside this, the SEC claimed that ALGO buyers invested in a joint venture.
The SEC also claimed that the Algorand Foundation “ attributes the potential growth of Algorand to potential demand for ALGO itself and its commitment to maintain a price floor for ALGO.”
Appeal process
In a tweet dated April 19, Algorand denied the SEC’s claims that ALGO is a security. According to the team, ALGOs are not securities under US law. The Algo team says it “meets clear regulatory guidelines” and adds:
Our priority is to always act in the best interests of our community. We look forward to seeing what this dynamic community builds next in Algorand.
ALGO price is currently trading at $0.1099. TVL did not react to Algofi’s decision to shut down with a big drop.
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