When Gary Gensler surveys the cryptoverse, there’s nary a corner that looks (to him, at least) as though it wouldn’t benefit from some of his seriously divided attention, or perhaps more. (Pity those areas under his surveil that actually made the SEC’s list of top priorities for this year.) There are the criminality of stablecoins, crypto exchanges to put out of business no matter what they do to stay in it (assuming their users don’t get them first), the endless frauds, the small matter of a little DIY trading shop known as Robinhood.
But there’s a reason Elizabeth Warren was hellbent on giving Gensler the whip hand over the financial services industry, and that’s because the man has an endless capacity for finding things to regulate. And now that he’s had his first successful brush with decentralized finance, he thinks he’ll dig a little deeper. And, no, he doesn’t need any new tools to do so just yet, thank you very much.
These peer-to-peer networks, so far completely unregulated in the U.S., may not be immune from oversight, said Gary Gensler, chairman of the Securities and Exchange Commission. Some decentralized finance projects, known as DeFi, have features that make them look like the types of entities the SEC oversees, Mr. Gensler said in an interview Wednesday…. Mr. Gensler, who took over in April, said projects that reward participants with valuable digital tokens or similar incentives could cross a line into activity that should be regulated, no matter how “decentralized” they say they are.
“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,” Mr. Gensler said. “There’s some incentive structure for those promoters and sponsors in the middle of this….”
The term DeFi is “a bit of a misnomer,” Mr. Gensler said, speaking generally and not about the Blockchain Credit case. ”These platforms facilitate something that might be decentralized in some aspects but highly centralized in other aspects.”
Crypto’s ‘DeFi’ Projects Aren’t Immune to Regulation, SEC’s Gensler Says [WSJ]
Robinhood’s crypto trading surges, as overall growth slows [AP]
Ohio man pleads guilty to running $300 million bitcoin laundering conspiracy that helped drug traffickers [CNBC]
The World’s Biggest Crypto Exchange Still Lacks U.S. Footing [NYT]
Cryptocurrency traders seek damages from Binance after a major outage cost them millions [CNBC]
For more of the latest in litigation, regulation, deals and financial services trends, sign up for Finance Docket, a partnership between Breaking Media publications Above the Law and Dealbreaker.