SEC Commissioner: New Proposal Could Give SEC Expansive Power to Regulate Crypto, Defi Platforms

A commissioner with the U.S. Securities and Exchange Commission (SEC) has voiced issues concerning a brand new proposal that might give the securities regulator new powers to control 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} latest proposal could possibly be devastating for the crypto business, Bloomberg reported Tuesday. Peirce is a pro-bitcoin commissioner, who can also be identified within the crypto group as “crypto mother.”

The SEC proposed amendments to control “important Treasury markets platforms” inside Regulation ATS final week. The 654-page proposal seeks to “increase Regulation ATS for various buying and selling techniques (ATS) that commerce authorities securities, NMS [National Market System] inventory, and different securities.” It additionally proposes to “prolong Regulation SCI to ATSs that commerce authorities securities” and “amend the SEC rule concerning the definition of an ‘change’ to handle a regulatory hole.”

Commissioner Peirce warned that whereas the proposal doesn’t point out crypto, it might give officers sweeping new powers to scrutinize cryptocurrency platforms, together with decentralized finance (defi) protocols. She advised the publication:

The proposal contains very expansive language, which, along with the chair’s obvious curiosity in regulating all issues crypto, means that it could possibly be used to control crypto platforms.

The pro-bitcoin commissioner harassed that “The proposal might attain extra varieties of buying and selling mechanisms, together with doubtlessly defi protocols.”

The securities watchdog claims that the proposal is supposed to shut a “regulatory hole” created by market individuals utilizing platforms that aren’t registered as exchanges or brokerages to commerce all varieties of securities. SEC Chairman Gary Gensler stated final week that it might “promote resiliency and larger entry within the Treasury market.”

The proposal is now open for public feedback. The SEC should maintain one other vote earlier than the laws develop into remaining.

Gensler has been vocal in regards to the need to regulate cryptocurrency and defi platforms. In December, he added a crypto adviser to his executive staff. In January, the SEC chairman stated, “If the buying and selling platforms don’t come into the regulated area, it’d be one other yr of the general public being susceptible.”

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