Bitcoin and blockchain technology have led the fight against financial market centralization, but digital asset institutions seem to be losing ground as they lean toward centralization.

Securities and Exchange Commission (SEC) chief Gary Gensler has once again criticized the cryptocurrency industry, this time for centralization while hiding behind a decentralized shield.

Speaking at the annual meeting of the Securities Industry and Financial Markets Association, Gensler criticized the crypto industry, saying its brokers are profiting from false declarations.

As Gensler put it:

We have seen centralization in the cryptocurrency market, which is founded on the idea of ​​decentralization; This area actually has a high concentration among middle market brokers.

Although many centralized exchange (CEX) platforms are based on the trading of decentralized digital assets, they are in a position to benefit disproportionately as a result of their centralization, he said.

He went on to explain:

There is a tendency for central brokers to take advantage of scope, network effects and access to valuable data.

The SEC wants digital assets to be classified as securities to give authorities better control over the industry.

Once viewed as securities, the stricter rules faced by stockbrokers apply to centralized trading platforms, allowing the SEC to scrutinize assets listed on their platforms.

The centralization of the cryptocurrency market that Gensler spoke about has been cited by many industry analysts, who view crypto trading platforms as an extension of centralized finance.

Unfair rating:

The SEC chairman’s language showed a desire to view digital assets as securities issued by central companies.

In fact, even though major centralized trading platforms such as Binance, FTX and others are centralized, digital assets are decentralized with ever-increasing community participation.

Privacy enthusiasts insist that decentralized trading platforms are the next way to wage a war on increased government oversight of the sector.

The recent whirlwind incident showed that some e-commerce hubs followed authorities’ directives before they were explicitly asked, while DEX exchanges continued to demonstrate their commitment to user privacy and decentralization.

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