Home
News
- 1 The US SEC proposed expanding the definition of a crypto exchange in January 2022.
- 2 ‘Crypto Mom’ Hester Pierce did not take the proposal and felt it may strangle new technology’s growth.
SEC Commissioner Hester Pierce discredited the recently proposed decentralized finance (DeFi) platforms. Earlier, the United States Securities and Exchange Commission proposed expanding the “exchange” definition. Pierce criticized the move and called it could potentially hamper the growth of growing technology and asset class space.
Reuters reported that SEC first proposed the plan in January 2022. It sought the expansion of the existing definition of a crypto exchange that would then be said to include platforms using “communication protocols.” Following the adoption, the change in definition is likely to bring more than existing crypto firms. This will eventually make the buyers and sellers come together, leading to less decentralization.
The SEC reportedly opened a public comment period of 30 days again on Friday, April 14, to take suggestions and comments from the broader crypto community over the proposal. Commissioner Pierce, popularly known as ‘crypto mom’ for her positive stance on crypto, criticized the move and cited it as an attack on emerging technology.
According to Reuters, the proposal got 3-2 votes for taking the additional public comments after criticism from many crypto firms. The action was “vague and aimed at roping in decentralized finance platforms.” Should this amendment not exist, the DeFi platforms would not fall under the scrutiny of the financial regulator.
In her statement, Pierce noted the reason for her dissent that the proposal indicates “stagnation, force centralization, urge expatriation, and welcome extinction of new technology” rather than embracing it.
Three of five SEC commissioners voted in favor, while two were against the proposal. Along with Commissioner Pierce, Commissioner Mark T. Uyeda also registered dissent while suggesting that the proposal raises concerns rather than solving them.
Peirce added that there were no clear indications of “communication protocol systems.” She argued that this vagueness could disrupt the number of businesses and the broader market. She cited the proposal and added that it brings unclear standards, which seems to be limiting the scope of crypto industry participants’ activities which will be posing to leave the First Amendment rights eroding.
Given the Commissioners’ different opinions over the proposal, the contrast within the agency raises community-wide concerns. However, SEC Chair Gary Gensler comes quite clear with this. He said, “Make no mistake: many crypto trading platforms already come under the current definition of an exchange. Most crypto trading platforms meet that definition, regardless of whether they call themselves decentralized.”
Disclaimer
The views and opinions stated by the author, or any people named in this article, are for informational ideas only, and they do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial los
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
