SEC boss Gensler continues his campaign against crypto exchanges
10/25/2022, 06:35 AM
The SEC boss, Gary Gensler, recently spoke at the Securities Industry and Financial Markets Association’s (SIFMA) annual meeting. In his speech, he attacked the crypto industry and questioned its decentralization properties. He acknowledged that finance has been centralized and concentrated “since antiquity.” He added that there is a “tendency for central intermediaries to benefit from scale, network effects, and access to valuable data.”
Gensler went on to say that just four asset managers managed over 80% of the total net assets in U.S. index funds. He then claimed that the crypto market is also centralized and that the SEC plans to scrutinize tokens listed on exchanges and take action on offering unregistered securities.
It’s clear that Gary Gensler doesn’t understand decentralization or the purpose of cryptocurrencies. He is simply trying to categorize crypto assets as securities so that he can regulate exchanges with the same rigorous rules that stock brokers and exchanges face. This is likely to make it harder for retail traders and benefit institutions that can jump through the extra hoops.
The only way Gensler and company can get their way and crack down on crypto is by classifying the decentralized assets as centralized securities rather than regulating the companies directly. However, there is hope that the proposed Lummis-Gillibrand crypto bill will give the CFTC more authority over regulating the asset class.
It is difficult to deny that crypto exchanges are highly centralized, given the fact that a few major players control the majority of the market. However, it is important to note that this is not necessarily a bad thing. Centralized exchanges offer a number of advantages, including increased security and liquidity.
But it is also worth noting that decentralized exchanges are beginning to gain traction, and they may eventually overtake centralized exchanges in terms of market share. So while it is currently accurate to say that crypto exchanges are highly centralized, this may not always be the case.
Gensler went on to say that just four asset managers managed over 80% of the total net assets in U.S. index funds. He then claimed that the crypto market is also centralized and that the SEC plans to scrutinize tokens listed on exchanges and take action on offering unregistered securities.It’s clear that Gary Gensler doesn’t understand decentralization or the purpose of cryptocurrencies. He is simply trying to categorize crypto assets as securities so that he can regulate exchanges with the same rigorous rules that stock brokers and exchanges face. This is likely to make it harder for retail traders and benefit institutions that can jump through the extra hoops.
The only way Gensler and company can get their way and crack down on crypto is by classifying the decentralized assets as centralized securities rather than regulating the companies directly. However, there is hope that the proposed Lummis-Gillibrand crypto bill will give the CFTC more authority over regulating the asset class.
It is difficult to deny that crypto exchanges are highly centralized, given the fact that a few major players control the majority of the market. However, it is important to note that this is not necessarily a bad thing. Centralized exchanges offer a number of advantages, including increased security and liquidity.
But it is also worth noting that decentralized exchanges are beginning to gain traction, and they may eventually overtake centralized exchanges in terms of market share. So while it is currently accurate to say that crypto exchanges are highly centralized, this may not always be the case.