The new rules recently proposed by the SEC for the supervision of systems for trading government bonds could allow the agency to also control crypto exchanges and platforms for the exchange of digital assets, such as Defi.
This was stated by SEC commissioner Hester Peirce, better known as a “crypto mom”, and the agency’s only Republican commissioner.
SEC rules a risk to DeFi
According to Bloomberg, Peirce says that while explicitly mentioning cryptocurrencies only once, the SEC’s new 654-page plan could pose a threat to token and cryptocurrency trading platforms.
“The proposal includes very broad language, which, coupled with the president’s apparent interest in regulating all things crypto, suggests it could be used to regulate crypto platforms. The proposal could reach more types of exchange mechanisms, potentially including DeFi protocols ”.
This is therefore a hypothesis advanced by the SEC commissioner who is more exposed and favorable to cryptocurrencies and decentralized finance, while President Gensler then refused to comment on these statements.
What the SEC provides
The new plan proposed by the SEC would actually have the main objective of extending the current regulations to platforms that trade Treasuries and other government bonds, but the risk is that they will also be extended to crypto platforms.
In fact, although on the one hand the basic idea would be only to fill a regulatory gap relating to trading platforms that currently do not have the obligation to register as exchanges or intermediaries, the new regulation proposed would also force the “protocol systems of communication “to register. This ambiguous definition could indeed also be attributed to crypto exchanges and DeFi platforms.
Gensler himself has repeatedly stated that he believes that many digital assets, excluding cryptocurrencies such as Bitcoin, could be securities, and therefore would fall within the competence of the SEC. In addition, he asked that crypto exchanges must register with the SEC itself in order to operate in the US, in order to be able to somehow supervise the operation.
If approved by the SEC commissioners, the proposed new regulation will be publicly available for 30 days for comment, then once entered into the federal register it would go into effect.
It will be necessary for the SEC to provide clarification on this issue, and at this point it is likely that among the comments it will receive there will also be some that will refer to crypto exchanges and DeFi platforms.