DeFi Not Immune to SEC Oversight, Gensler Says: Report
DeFi projects that reward participants with incentives or digital tokens could be subject to SEC regulation, the SEC chairman said.
U.S. Securities and Exchange Commission Chairman Gary Gensler warned that decentralized finance (DeFi) projects aren't immune to oversight by the markets' regulator.
- DeFi projects have features that make them look like the type of entities regulated by the SEC, Gensler said in an interview Wednesday with the Wall Street Journal.
- Even though they are 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, he said.
- “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,” Gensler said. “There’s some incentive structure for those promoters and sponsors in the middle of this.”
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.