SEC chief says Defi projects “have more centralization,” warns they don’t reach their full potential beyond regulatory laws

Gary Gensler, Chairman of the U.S. Securities and Exchange Commission, warns of potential risks associated with the decentralized financial sector (Defi).

In an interview with Fox Business, Gensler says that while he and the SEC remain neutral on innovative technologies related to bitcoin and Defi, he is concerned about the risks the industry poses to investors. He argues that some decentralized platforms “actually have more centralization” and that crypto projects need to register their products with the regulatory authority.

 
“We focus on protecting investors. We are neutral on technology, bitcoin and other crypto tokens … and innovative technologies. But at the same time, we are not neutral about protecting investors. Therefore, if someone is involved in a security project, they must log in, register.

These so-called decentralized financial platforms actually have a greater degree of centralization. There’s a group of entrepreneurs running these platforms and they have to come and work with us and register.”

Gensler also notes that the Defi field will not reach its full potential if companies and projects in the sector try to stay outside the regulatory framework.

“This area will not reach its potential if it tries to stay outside our laws. Our money laundering laws, our tax compliance laws and the things we focus on protecting investors at the FCC.”

As for how the president relates to the digital dollar, he prefers to leave the issue to the discretion of the U.S. Federal Reserve, Treasury and Congress.

Gensler had previously expressed concern about using stable currencies to avoid traditional banking regulations.

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