The Crypto Industry Is Not Decentralized: SEC Chief

Paradoxically, cryptocurrency markets are not decentralized, said Gary Gensler, chair of the Securities and Exchange Commission (SEC) Monday.

The chairman argued that there is too much market dominance among a few “middlemen” in the industry, stifling competition.

centralization of financial markets

According to the Chairman of the Board of Directors prepared notes At the annual meeting of the Securities Industry and Financial Markets Association, central brokers in financial markets tend to benefit from “scope, network effects, and access to valuable data.”

He continued, “Although technological innovations frequently disrupt established business models, centralization still tends to re-emerge.”

As noted by the Chairman, only four US asset managers now control 80% of all assets held in US listed equity index funds. Stock market underwriters responsible for handling orders from the retail market are also moving towards centralization, due to the fact that executions are largely OTC.

Gensler argued that trends of centralization extend even to the crypto market, “which is founded on the idea of ​​decentralization.”

“This region actually has a large concentration of middle-market intermediaries,” he said. Therefore, we need to be vigilant about the areas where economic rents have accumulated and focus on them or may do so in the future.”

Currently, the biggest players in the cryptocurrency industry are cryptocurrency exchanges – companies that facilitate the trading of liquid digital assets. In the case of the industry-wide meltdown after the crash in the crypto market in May and June, bankrupt companies turned to the world’s leading exchanges FTX And Binance for bailouts and support.

“In the case of brokers, so-called cryptocurrency exchanges or lending platforms and the like, they are very focused,” said the head of the SEC.

Dominant exchanges like Binance continue to branch out into all sectors of the crypto industry – from cloud mining to me stablecoinsuntil that time Owning a Leading Blockchain.

In August, the European Central Bank issued a discussion material which touched upon how dominant crypto-issuance technology platforms can develop the central “network externalities” in the money market. He suggested using central bank digital currency to combat such cryptocurrencies from challenging the monetary supremacy of the local currency for the local area.

All cryptocurrency exchanges violate the law: Gensler

During the question-and-answer period that followed his comments, the SEC chief suggested that most, if not all, cryptocurrency exchanges list unregistered securities, in violation of the law.

Chairman repeatedly advertiser His belief that almost all crypto assets except Bitcoin are likely to be securities. Meanwhile, major exchanges usually list hundreds of tokens.

“It is likely that there will be some security tokens on it,” he said.

The Post-Crypto Industry Is Not Decentralized: The SEC Head debuted on CryptoPotato.

Leave a Reply

Your email address will not be published. Required fields are marked *