- The US SEC has voted to change a proposed rule targeting DeFi cryptocurrency exchanges.
- The regulator proposed the rule in January 2022 to ensure the registration of exchanges.
- SEC staff have joined industry players to criticize the move.
The United States Securities and Exchange Commission (SEC) has turned its attention from individual entities to the decentralized finance (DeFi) space as a whole. In its latest move, the regulator has reopened a 2022 proposal to buff up gaps in the regulatory sector. Specifically, the SEC wants to prevent unregistered platforms from offering securities trading unless they have identified with the agency as a broker of exchange.
SEC targets DeFi in vote to revisit proposal concerning the definition of ‘exchange’
— Ben DeLisi (@realbendel) April 14, 2023
pic.twitter.com/ZizsmTrG0y
Based on the filing, the public has until June 13 (30 days) to submit comments following its publication in the Federal Register. It is worth mentioning that feedback from the public will have a bearing on the final draft of the proposal.
SEC emphasizes the need for crypto exchanges and DeFi platforms to register
The news comes after a Friday, April 14 move by the SEC, when the agency’s five-member commission voted three against two to reopen the comment period on amendments to alter the ‘exchange’ definition under the Exchange Act Rule 3b-16. Under the proposal, an “exchange” would be more closely defined as a system that brings together buyers and sellers of securities through structured methods to negotiate a trade” and explicitly include DeFi.
The altered proposal seeks to emphasize the need for cryptocurrency exchanges and DeFi platforms to register with the SEC. Notably, the revised proposal comprises language specifically designed to cover digital assets and the DeFi space, which according to the regulator, falls under the SEC’s jurisdiction.
Citing Chairman Gary Gensler,
Given how crypto trading platforms operate, many of them currently are exchanges, regardless of the reopening release we’re considering today. These platforms match orders of multiple buyers and sellers of crypto securities using established non-discretionary methods....
Before the meeting, Gensler highlighted that the new proposal would serve in the best interest of investors, bringing several DeFi platforms under the scope of the SEC. Nevertheless, Jessica Wachter, an economist with the SEC, notes that most of the newly covered firms are likely to try to get an exemption under the Alternative Trading System exemption.
Among the five SEC commissioners was Hester Pierce, otherwise called 'crypto mom', who said during the meeting that she was disappointed with the regulator’s decision to change the proposal. In her opinion, the revised proposal would only serve the prominent personalities in traditional finance. Hester also accused the SEC of being “uninterested in facilitating innovation and competition in the financial markets.”
The SEC will implement the proposal after a majority approval.
SEC to boost its crypto crime department
Besides changing the regulatory language, the SEC continues to enhance its crypto crime department as part of its effort to clamp down on digital assets.
The Division of Enforcement - Crypto Assets and Cyber Unit seeks to hire General Attorneys in New York, NY; San Francisco, CA; and Washington, DC. For more information and to apply, click here: https://t.co/OI6YQk5doI.
— SEC Careers (@SEC_Careers) April 10, 2023
Based on the above tweet by the agency’s careers department, the Securities and Exchange Commission is hiring three new general attorneys in New York, San Francisco, and Washington, DC.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
US presidential election outcome could shape the future of crypto
US citizens will go to the polls to elect a new president on November 5, and their choice could be key for the future of the crypto industry and thus the price outlook for Bitcoin (BTC).
Bitcoin ETFs beat Gold ETFs with 65% gain since launch
Bitcoin ETFs have reshaped the digital asset investment landscape since their approval in January. Their total assets under management climbed over $70 billion during the weekend, placing them ahead of other investment products, including gold.
XRP eyes 10% rally amid relisting across crypto exchanges and growing institutional demand
Ripple's XRP is trading at $0.5050 up slightly by 0.2% in the past 24 hours as it struggles to sustain a move above a key symmetry triangle resistance. Meanwhile, in its recently released Q3 report, Ripple noted the rising listing and relisting of XRP across crypto exchanges and global platforms.
Ethereum Price Forecast: ETH struggles below $2,500 amid State of Michigan pension fund investment in ETH ETF
Ethereum is trading near $2,420, down about 1% on Monday, but could bounce off a key descending trendline close to the $2,258 historically high demand zone. Meanwhile, the State of Michigan pension fund revealed an investment of $11 million in ETH exchange-traded funds.
Bitcoin: New all-time high at $78,900 looks feasible
Bitcoin price declines over 2% this week, but the bounce from a key technical level on the weekly chart signals chances of hitting a new all-time high in the short term. US spot Bitcoin ETFs posted $596 million in inflows until Thursday despite the increased profit-taking activity.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.