According to Gary Gensler (chairman of the US Securities and Exchange Commission), decentralized finance is not a new concept.
Gensler stated that it is a mistake to call them software that they release on the internet. He said that these platforms are not as centralized as the New York Stock Exchange and that it is “sort of an interesting thing that’s in between.”
These remarks are in response to reports Gensler won’t be a “cheerleader for crypto” and that, once the SEC tightens regulations regarding crypto exchanges, he plans to focus on policing decentralized finance.
In the interview, Gensler said he remains “technology-neutral,” but cryptoassets are no different than any others in what concerns investor protection, safeguarding against illicit activity, and preserving financial stability.
Gensler says that the global market value of the asset is approximately USD 2tn. This means that it will have the necessary level and nature to remain relevant in five to ten years. It doesn’t last outside for long, as history shows. Finance is all about trust.
Gensler stated that his focus on crypto trading platforms stems from the fact they can accommodate at least 95% activity in this “highly speculated asset” but provide “really sparse protection for investors.”
He said that regulators have the authority to regulate platforms that he called “decentralized”. The chairman acknowledged that regulators face a challenge because these platforms are not controlled by traditional brokers who could apply regulations.
Ryan Selkis (CEO of US-based crypto intelligence company Messari) criticized Gensler for his stance and made a joke about Gensler’s past work as an investment banker at Goldman Sachs.
“Goldman Gary would have squashed ETH in 2016 to protect his security. Selkis stated that the US crypto economy would not have existed if he had been in charge.
He stated that the “SEC” approach to growth, anti-retail (who would do the worst in the Gensler correction), and anti-innovation is absurd. It makes no sense to wait for government permission. *”
During this time, the chairman of the SEC is scheduled to present before the European Parliament’s Economic and Monetary Affairs Committee. This will discuss transatlantic cooperation in financial services.
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