DeFi Apps Can Be Regulated, according to SEC’s Gary Gensler


According to the SEC chairman, DeFi is well-organized enough to meet regulatory requirements.

Gary Gensler, the Securities and Exchange Commission (SEC) head, has said that the agency may begin to regulate decentralized finance (DeFi) networks.

DeFi Developers, according to Gensler, may be identified

The Securities and Exchange Commission has previously targeted centrally-operated crypto businesses that have launched initial coin offerings (ICOs), investment funds, exchanges, or otherwise marketed cryptocurrency.

DeFi platforms, on the other hand, are distributed. As a result, they usually process bitcoin transactions and do not retain cryptocurrency on behalf of their customers.

Nonetheless, according to Gensler, such DeFi platforms are well-organized enough to be targeted by the SEC.

According to Gensler, a core group of people is still active in creating software and regulating each platform. According to the Wall Street Journal, “There’s some incentive structure for those promoters and sponsors in the middle of this.”

In reality, the Securities and Exchange Commission (SEC) has already taken action against DeFi. The Securities and Exchange Commission (SEC) charged Blockchain Credit Partners on Aug. 7 with unregistered token sales and misled investors about profits. However, it is arguable that the firm did not provide real DeFi services.

In addition, the SEC went after the operator of Etherdelta, a major decentralized exchange, in 2018. Zachary Colburn, the operator, was charged with operating an unlicensed exchange.

Can the SEC put a stop to DeFi?

DeFi has long been viewed as a means to avoid regulation by dealing with cryptocurrencies rather than cash. If DeFi developers stay completely secret, they will almost certainly be able to avoid any rules.

Some of the most popular DeFi platforms, such as Aave, Uniswap, and Compound, are created by incorporated businesses with completely transparent teams. These characteristics might make Gensler and the SEC ideal targets for the biggest DeFi firms.

On the other side, if a well-known DeFi firm is fined or shut down by the SEC, the project may be forked by the community, allowing it to continue functioning under a new group of developers.


Please enter your comment!
Please enter your name here