Gary Gensler, chairman of the United States Securities and Exchange Commission, stated that decentralized finance (DeFi) is highly centralized in certain aspects and urged projects working in the sector to annals with the SEC.

Speaking to The Wall Street Journal on Thursday, Gensler suggested that the decentralized notions implied by the term DeFi were "a bit of a misnomer," calculation:

"These platforms facilitate something that might exist decentralized in some aspects simply highly centralized in other aspects."

While DeFi projects are designed to be autonomous platforms that operate without a centralized authority, Gensler asserted that many are developed and controlled by a centralized squad that is incentivized to promote its platforms.

"In that location'due south still a core grouping of folks that are non only writing the software, similar the open-source software, but they ofttimes have governance and fees," he said, continuing, "In that location'south some incentive structure for those promoters and sponsors in the middle of this."

Gensler expanded on his comments in a Friday interview with Fox Business and suggested that such DeFi projects are centralized plenty to fall nether the scope of regulation. He urged DeFi projects to register with the SEC:

"These and so-called decentralized finance platforms really have a lot of centralization. There's a group of entrepreneurs that are running these platforms. They should come in and to that extent piece of work with us and get registered."

Before this calendar month, SEC Commissioner Hester Peirce — colloquially known equally "Crypto Mom" — echoed similar sentiments from a different angle when she warned of "shadow-centralization" within the DeFi sector.

Peirce stated that "if regulators can find a centralized office or grouping of people that they can catch hold of, they will grab hold of them," equally she urged for circumspection in how projects are built from the ground up.

"If you want to exist decentralized, yous really need to be decentralized, and that is going to and then put yous in a different category from the perspective of regulators because that'southward just not something that nosotros've dealt with before," she said.

Related: Crypto-friendly CFTC commissioner Brian Quintenz reportedly plans to step downwards

Cointelegraph reported on Aug. 3 that Gensler had identified several crypto policy changes that are being examined by the SEC, including matters apropos DeFi, lending platforms, token offerings, stablecoins, exchange-traded funds and custody.