The head of the SEC Crypto Assets and Cyber Unit David Hirsch just sent a chilling warning to the crypto industry.
Speaking on Tuesday at the Securities Enforcement Forum Central in Chicago, Hirsch said that aside from Coinbase and Binance, other centralized exchanges and decentralized finance companies that operate in similar ways will be in the firing line for SEC enforcement action.
Decentralized applications, or dApps, are different from centralized exchanges in that they run on a blockchain.
They do not need to be registered with the SEC.
However, the SEC is losing ground in its lawsuit against Ripple Labs over its issuing of XRP securities.
The agency argues that major tokens like Cardano, Solana, and Polygon are securities, clouding their demand outlook in the US.SEC Warns of DeFi Crackdown And even though they operate in different ways than centralized exchanges like Coinbase and Bitfinance, says Hirsch, the deFi business model will still fall under the SEC’s jurisdiction.