The head of the US Securities and Exchange Commission (SEC) Gary Gensler is ready to draw regulatory limits for decentralized financing (DeFi) and points out that many projects are not sufficiently decentralized to escape the agency’s oversight.
Some DeFi projects have certain aspects that they put in a basket with the regulators screened companies who insist that it is primarily about investor protection.
Why many DeFi projects fit into the profile
Gensler, that one warned That the DeFi sector is inevitably regulated explained why some projects meet the SEC’s target profile.
Because they’re being developed by a “core group of people” who typically have incentives to promote their platforms, many of the projects patrolled demonstrated “very” centralized functionality, Gensler said The Wall Street Journal.
Despite their non-regulatory nature, many DeFi projects have an organized group of developers who typically have incentives to promote their platforms and, as such, have clear centralized functions that require regulatory compliance, Gensler explained.
“There is still a core group of people who not only write the software, like the open source software, but often also have governance and fees,” he said, focusing on the “incentive structure for the promoters and sponsors in the Center. ”
Work with us and register
“These so-called decentralized financial platforms actually have a lot of centralization. There is a group of entrepreneurs who run these platforms. You should come in and work with us and register, ”Gensler said in another interview with Fox business, this time asking DeFi projects to register with the commission, while the SEC may be “neutral” on crypto but not neutral on investor protection.
In the growing plethora of DeFi projects, there are those with completely anonymous developers, but some of the largest DeFi platforms have a more transparent background that could make them the watchdog’s top targets.
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