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SEC Chairman Gary Gensler does not consider decentralization a fact of the crypto market


United States Securities and Exchange Commission (SEC) Chairman Gary Gensler has stated that he does not consider decentralization a reality of the cryptocurrency market, despite the origins of digital currencies in disrupting the cryptocurrency market. broken centralized management agencies. Speaking at the Securities and Financial Markets Industry Association (SIFMA) annual meeting on October 24, Gensler acknowledged that finance has been centralized and centralized “since ancient times.” He added that there is “a tendency for central intermediaries to benefit from scale, network effects, and access to valuable data.” For example, Gensler says that just four asset managers have managed more than 80% of total net assets in US index funds.

The aftermath of the great financial crisis caused by centralized banks and lending companies helped give birth to cryptocurrencies. However, the boss of the SEC don’t see it this way. “We’ve even seen centralization in the crypto market, which was founded on the idea of ​​decentralization. The sector actually has a significant concentration of middlemen in the middle of the market. school.”

Gensler used the analogy of sand flowing through an hourglass to explain how financial intermediaries sit at the neck of the hourglass, as they process transactions worth trillions of dollars and can profit. disproportionately profitable, based on their vantage point.

Then he said that he believes some cryptocurrency exchange works in this problematic way, although he doesn’t indicate any particular exchange by name.

Gensler suggested during a question and answer session during his virtual appearance that most, if not all, crypto exchanges violate securities laws by listing unregistered securities.

“Since it involves intermediaries, so-called cryptocurrency exchanges or lending platforms and the like, they are highly centralized,” said the SEC chairman. “They tend to have hundreds of tokens. Having some security tokens on them is beyond the realm of possibility.”

Gensler asked exchanges to participate and asked the securities regulator if it is unclear whether a cryptocurrency or token can be considered a security, and said the SEC could work on a case-by-case basis. appropriate to determine whether an exemption is available. is needed to be done for a particular project.

Much of the digital asset industry has failed to align with Gensler’s stance on cryptocurrencies during his tenure at the helm of the securities regulator and he and the Chairman of the Commodity Futures Trading Commission. CFTC) Rostin Behnam doesn’t always seem to be on the same page. While the two appear to have agreed on the expanded role of the CFTC in regulating the market for digital goods such as Bitcointhey may disagree on which cryptocurrencies fall under that definition.

Without specifically mentioning cryptocurrencies, Gensler emphasized the importance of treating market participants equally, focusing on “competition on price, service, and other key factors” instead. for market manipulation or “whether the game is fair.”


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