Despite being someone who has had a light heart for cryptocurrency, United States Securities and Exchange Commission Chairman, Gary Gensler has started to raise concerns over the increase in DeFi-based activities and says that regulations are imminent and must be implemented in order to maintain operations and provide protection.
Being known as ‘Crypto Friendly’, Gary said that he pressured many officials to go forward with legislation regarding crypto. Gary stated that he still does have a soft spot for crypto and blockchain tech and is very much interested in it; despite also teaching it and learning from it, the protection of investors and users is something that cannot be ignored or let go of in any possible way. Gary also said that if anyone has doubts on this, they can continue on that, but the SEC is responsible for protecting users and investors from experience any sort of fraudulent activity in the DeFi space.
Regulations on the way
Adding to that, Gary has given the staff a green signal to utilize any sort of Authorization where possibly applicable, basically assuring that regulations are coming and that the team is working hard to develop crypto policies for areas such as Trading Venues, ICO’s, loaning platforms, DeFi, stable value coins, ETFs, custody and several coin funding firms.
Gary highlighted that applying regulatory measures on crypto exchanges gives the government a lot of power to keep a tight grip on crypto trading. Despite the US having the highest number of regulated exchanges worldwide, companies like Binance, ByBIt and OKEx have had to accept regulations applied by other countries, giving light to a much severe crackdown.
Focusing on the rapid growth of the DeFi space, DeFi protocols are aimed to remove middlemen systems by introducing smart contracts that handle the financial services to run. The problem highlighted by Gary is was that if finance companies are to provide any interest-based return on crypto assets, the loans coming will flash brightly in the eyes of the SEC and platforms that work on pooling digital assets will also be in the eyes of the SEC for regulations.
As a conclusion to all this, Gary has clearly highlighted that any crypto-based loaning service and many DeFi platforms make investors worried, so the SEC has a huge role in protecting investors from Fraud.