- New US SEC Chair Gary Gensler has warned that DeFi projects are not immune to oversight.
- In an interview, he stated that they have elements that make them similar to what comes under SEC.
- Gensler was appointed Chairman only recently, in April.
This just in: U.S. Securities and Exchange Commission Chair Gary Gensler is warning DeFi projects that they are not immune to oversight by the markets regulator.
In an interview on Wednesday, Gensler spoke about DeFi projects. He pointed out what makes them likely prospects for the SEC to govern. In fact, he noted that they have features like incentives that make them similar to what is already under SEC.
Wall Street Journal conducted the interview, discussing many important matters of which DeFi and crypto projects were a major part. Gensler has been a policymaker for very a long time. He has also served as a former banker at Goldman Sachs as well. Only recently, in April, he took over as chair of the SEC.
For this, he said:
Despite being decentralized, with no central entity in charge, DeFi projects that reward participants with incentives or digital tokens could enter territory that is subject to SEC regulation.
DeFi has been so far, the greatest creation of the last decade. It finally enables a payments and trade system that does not involve a third party overseeing the transaction. This way, it has removed the many evils of a traditional finance system. However, it seems like it might still be governed as traditional systems are as per the new SEC chair.
There’s still a core group of folks that are not only writing the software, like the open-source software, but they often have governance and fees. There’s some incentive structure for those promoters and sponsors in the middle of this.