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A commissioner with the U.S. Securities and Exchange Commission (SEC) has voiced concerns regarding a new proposal that could give the securities regulator new powers to regulate cryptocurrency platforms and decentralized finance (defi) protocols.
New SEC Proposal Could Hurt the Crypto Industry, Commissioner Peirce Cautions
U.S. Securities and Exchange Commission (SEC) Commissioner Hester Peirce has warned that a recent proposal could be devastating for the crypto industry, Bloomberg reported Tuesday. Peirce is a pro-bitcoin commissioner, who is also known in the crypto community as âcrypto mom.â
The SEC proposed amendments to regulate âsignificant Treasury markets platformsâ within Regulation ATS last week. The 654-page proposal seeks to âexpand Regulation ATS for alternative trading systems (ATS) that trade government securities, NMS [National Market System] stock, and other securities.â It also proposes to âextend Regulation SCI to ATSs that trade government securitiesâ and âamend the SEC rule regarding the definition of an âexchangeâ to address a regulatory gap.â
Commissioner Peirce warned that while the proposal does not mention crypto, it could give officials sweeping new powers to scrutinize cryptocurrency platforms, including decentralized finance (defi) protocols. She told the publication:
The proposal includes very expansive language, which, together with the chairâs apparent interest in regulating all things crypto, suggests that it could be used to regulate crypto platforms.
The pro-bitcoin commissioner stressed that âThe proposal could reach more types of trading mechanisms, including potentially defi protocols.â
The securities watchdog claims that the proposal is meant to close a âregulatory gapâ created by market participants using platforms that are not registered as exchanges or brokerages to trade all types of securities. SEC Chairman Gary Gensler said last week that it would âpromote resiliency and greater access in the Treasury market.â
The proposal is now open for public comments. The SEC must hold another vote before the regulations become final.
Gensler has been vocal about the need to regulate cryptocurrency and defi platforms. In December, he added a crypto adviser to his executive staff. In January, the SEC chairman said, âIf the trading platforms donât come into the regulated space, itâd be another year of the public being vulnerable.â
Do you think the SEC should have more power to regulate crypto trading platforms and defi protocols? Let us know in the comments section below.
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