• The US Securities and Exchange Commission (SEC) is re-evaluating a 2022 proposal to broaden the definition of an “exchange” that could potentially subject decentralized finance (DeFi) platforms to regulation.
• SEC Chair Gary Gensler asserts that a majority of crypto platforms currently function as unregistered securities exchanges, regardless of any modifications to the definition of an exchange.
• SEC officials have revealed that the reopening and supplementary information were prompted by market participants seeking further details on the proposed amendments and their application to crypto assets and DeFi.
US SEC Revisits Proposal for 2022
The U.S. Securities and Exchange Commission (SEC) is set to reconsider a 2022 proposal on Friday that seeks to broaden the definition of an “exchange.” This move comes in response to concerns from the cryptocurrency industry, which is apprehensive about being inadvertently caught in the regulatory net.
Proposal To Apply Exchange Rules to DeFi Projects
The U.S. Securities and Exchange Commission (SEC) appears to be setting its sights on decentralized finance (DeFi) as it reconsiders a proposal from 2022 that could classify DeFi platforms as exchanges requiring regulation. Last year, the SEC proposed broadening the definition of “exchange” to encompass a wider range of trading activities in the U.S., highlighting a “regulatory disparity” as some entities engaging in trading activity were not regulated as exchanges.
Crypto Industry Criticism
The SEC reviewed comments from the crypto industry last year, which criticized the initial proposal as an overreaching power grab that lacked sufficient clarity to be considered legitimate. In response to this criticism, the commission will vote on Friday on an updated proposal. If approved, the revised proposal would employ more explicit language to encompass DeFi within the expanded definition of regulated exchanges, and it would outline estimates of the potential costs this change could impose on the industry.
SEC Chair’s Remarks
SEC Chair Gary Gensler asserts that a majority of crypto platforms currently function as unregistered securities exchanges, regardless of any modifications to