The US Securities and Exchange Commission (SEC) commissioner expressed his concern over a new proposal that could give the securities regulator new powers to regulate cryptocurrency platforms and decentralised finance (DeFi) protocols.
New SEC Proposal Could Hurt the Crypto Industry:
Bloomberg reported Tuesday that Securities and Exchange Commission (SEC) Commissioner Hester Peirce warned that a recent proposal could be devastating for the crypto industry. Peirce, also known as Crypto Mom in the crypto community, is a pro-bitcoin commissioner.
Regulation ATS contains provisions to regulate “significant Treasury markets platforms.” Last week, the SEC proposed these changes. The 654 pages Proposal sought to “expand Regulation ATS to cover alternative trading systems that trade government securities, NMS stock, and other securities.”
The SEC rule regarding the definition of ‘exchange’ will also be amended to address a regulatory gap, and Regulation SCI will also be extended to ATSs that trade government securities.”
The commissioner warned that even if the Proposal does not mention crypto, it could give officials sweeping powers to scrutinise cryptocurrency platforms, including decentralised finance (Defi) protocols.
According to the publication, the Proposal contains very expansive language, coupled with the chair’s apparent interest in regulating everything crypto, which suggests that it could be used to regulate crypto platforms.
As the bitcoin commissioner noted, “The proposal could potentially encompass more types of trading mechanisms, including Defi protocols.”
Securities regulators claim the Proposal would close a “regulatory gap” created by market participants trading securities via platforms that aren’t registered as exchanges or brokerages.
Gary Gensler said last week the Proposal would “promote resiliency and greater access to the Treasury market.” The Proposal is now open for public comments, and the SEC must hold a vote again before the regulations become final.
SEC Chairman Genesler has been vocal about regulating crypto and Defi platforms. In Dec, he added a crypto adviser to his executive staff. In January, he said, “If there isn’t a regulatory framework for these platforms, the public would be at risk for yet another year.”