- DeFi industry is highly risky and concerning to Gary Gensler
- The SEC chair is not fond of cryptos though he is an expert in the industry
- Gensler believes that the decentralized lending industry poses challenges
- The SEC chair believes crypto regulations can help investors protect themselves from losing their hard-earned funds
- Following the scenario, Gary has been found urging senators to bring legislation
DeFi is one of the most rapidly growing sectors in the crypto ecosystem. Since the beginning of this year, the industry has seen tremendous highs in terms of its total value locked. However, the decentralized nature of the space attracts several illicit actors making the sector risky. Following the scenario, Gary Gensler, the chair of the United States Securities and Exchange Commission (SEC), has also shown concerns. According to Gensler, the industry and several other cryptocurrency decentralized finance industries are concerning due to its nature.
Gary Gensler is a crypto industry specialist
This year, Gary Gensler was appointed to act as the chair of the US SEC, as Joe Biden took the Presidential chair. Prior to acting as the SEC chair, Gensler used to teach lessons on cryptocurrency and blockchain at the Massachusetts Institute of Technology Sloan School of Business.
However, the SEC chair has clarified that although he is an expert in the industry, cryptocurrencies are not in their infancy. Moreover, Gensler claimed that he asked his staff to use all the authorities of the agency.
DeFi brings fresh challenges as per SEC chair
According to Gary Gensler, the DeFi industry poses fresh challenges. He believes that the sector consists of a lot of threats and risks to the investors in the market. Ultimately, the factors become a greater challenge to the financial regulators.
Gary further explained that the fluctuation in the market and novel products are some of the risk factors. He highlighted that crypto lending platforms and DeFi platforms raise a number of challenges for investors and regulators trying to protect them.
SEC chair urging congress to regulate crypto firms
At the end of Q1 2021, Gary Gensler was observed urging the United States senators to regulate cryptocurrency exchanges. Indeed, he asked to take such a stance during a virtual hearing. Gensler further explained that he is not neutral on cryptocurrency when it comes to the protection of investors.
Strict regulations can protect crypto investors
IN the Aspen Security Forum, Gary Gensler outlined what he sees as the priority zone for digital currency legislation. According to the SEC chair, the legislative priority should centre on crypto trading, lending, and DeFi platforms. To be specific, Gensler is concerned about the current lack of investor protections and worries that individuals can lose their hard-earned funds.