- The SEC chair stated that new technologies can help to create new types of economic contests.
- Gensler’s remarks on the rise of centralization in the crypto ecosystem.
Gary Gensler, the chairman of the Securities and Exchange Commission (SEC), criticized what he believed to be the excessive control held in the market by centralized cryptocurrency exchanges. The SEC chair made a point to make a passing shot at the cryptocurrency industry while also warning about the risks of centralization in traditional finance.
Gensler’s View of Centralization in the Crypto Industry
As per the recent report, before the annual meeting of the Securities Industry and Financial Markets Association, a well-known trade association, Gensler made many statements. These statements mainly centered on encouraging competition among equity market makers.
Gensler said in the statement that;
We’ve even seen centralization in the crypto market, which was founded on the idea of decentralization. This field actually has significant concentration among intermediaries in the middle of the market.
Then, without naming any specific exchanges, Gensler believes a significant number of crypto exchanges operate in this problematic way. And the SEC chair stated that the new technologies can help to create new types of economic contests, but centralization quickly finds a way to re-establish itself in unique sectors. This statement appeared to be a reference to blockchain technology.
Furthermore, Gensler’s remarks particularly on the rise of centralization in the crypto ecosystem. And pointed out the recent steps made by government agencies to restrict some of the decentralized aspects of crypto and DeFi.
The Office of Foreign Asset Control (OFAC) of the Treasury Department sanctioned Tornado Cash in August and blacklisted a multitude of wallet addresses connected with their service. The incident also widened the gap between supporters of decentralized projects and centralized crypto firms.