The US Securities and Exchange Commission (SEC) has said that decentralized finance (DeFi) poses various risks to crypto investors. SEC chief Gary Gensler talked about the challenges of DeFi while speaking before the House Appropriations Committee on the 26th of May. Gary Gensler mentioned his concern about the high volatility across the crypto market. The US SEC has continued its timid approach towards cryptocurrencies.
“Crypto lending platforms and DeFi raise challenges for investors.”
According to the “Testimony Before the Subcommittee on Financial Services and General Government, US House Appropriations Committee,” the SEC chairman has said that crypto lending platforms and DeFi raise challenges for crypto investors. Although the SEC chief noted that the crypto market had surged significantly over the last five years, he added that the crypto market valuation had also declined greatly in the last 12 days. Currently, the total market valuation for all cryptocurrencies was $1.6 trillion. On the same day, Gensler said that 80 tokens had a market cap of $1 billion, and about 1,600 had a market value of over $1 million.
Gensler pointed to the increased trading volume of cryptocurrencies.
SEC chair Gray Gensler pointed to the increased trading volume of cryptocurrencies. He said that daily trading volume jumped from $130 billion to $330 billion. However, the SEC chairman said that regulatory authorities do not record the figures as transactions occurred on unregistered crypto exchanges. He added that token trading on unregistered exchanges is one of the “regulatory gaps” in the crypto space. Addressing the various challenges countering investors’ protection, Gary Gensler explained that cryptos on the market could be sold, traded, or offered against the federal securities laws. He said that none of the exchanges trading cryptocurrencies has registered as an exchange with the SEC.