U.S. Securities and Exchange Commission Commissioner Hester Peirce has spoken out against the regulator’s proposed new rules that would amend the definition of “exchange.”
In a statement released on April 14, Peirce criticized the proposal and the SEC’s leadership, arguing that the Commission is expanding its regulatory reach unnecessarily.
She also accused the SEC of failing to consider the impact of the proposed rule changes on hundreds of systems and the potential market disruption that could result.
The SEC recently decided to reopen the comment period for amendments to Exchange Act Rule 3b-16 Regarding the Definition of “Exchange” after several crypto firms questioned the proposed changes.
The plan would subject decentralized platforms to SEC control, and many in the industry have expressed concern about the ambiguity of the term “communication protocols” used in the proposed changes.
Peirce argued that the proposal imposes impractical standards for decentralized activity and participants and that the SEC has failed to consider whether compliance with the new rules is possible. She suggested that the SEC’s aim is to regulate decentralized finance out of existence, rather than responding to the serious concerns raised by commenters.
Many stakeholders in the crypto industry have praised Peirce’s statement, as the SEC has faced criticism for its heavy-handed approach to regulating the industry. With this renewed focus on the definition of “exchange,” it remains to be seen what impact the SEC’s new rules will have on decentralized finance and the wider crypto market.