US SEC Chairman: No matter how “decentralized” you are, DeFi projects can be regulated

Gary Gensler, chairman of the US Securities and Exchange Commission (SEC), said that the agency can supervise decentralized finance (DeFi) projects.

US SEC Chairman: No matter how "decentralized" you are, DeFi projects can be regulated

Gensler said in an interview with The Wall Street Journal on Wednesday that, specifically, no matter how “decentralized” they say they are, DeFi projects that reward participants with valuable tokens or similar incentives can be regulated.

DeFi developers wrote software for automated trading and then said that they left the project, allowing it to run without a central entity. They argued that this kind of decentralization made the SEC need no supervision, and the SEC has also stated that some cryptocurrencies, such as Bitcoin and Ethereum , are already sufficiently decentralized to avoid supervision.

But Gensler said,

“For DeFi projects, there is still a core group of people not only writing software, such as open source software, but they usually have governance rights and fees. In the middle, there are some incentives for those sponsors and sponsors.”

According to Gensler, the term DeFi is “a bit of a misnomer” because these platforms “promote things that may be decentralized in some ways but highly centralized in others.”

Gensler said that some DeFi platforms can be compared with P2P lending platforms regulated by the US Securities and Exchange Commission.

This is not the first time Gensler has called for the regulation of DeFi. Earlier this month, the SEC chairman said: “In my opinion, the priority of legislation should be focused on cryptocurrency trading, lending and DeFi platforms. Regulators will benefit from additional powers for cryptocurrency trading and lending. Make rules and attach guardrails to them.”

 

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/us-sec-chairman-no-matter-how-decentralized-you-are-defi-projects-can-be-regulated/
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