The US SEC reopens public comment for a draft rule that expands its crypto regulatory power, adding explicit language covering digital asset and DeFi exchanges
The reopening extends the SEC’s earlier buildout of crypto-specific capacity, including its planned Office of Crypto Assets for corporate filings. It signals that the agency was trying to fit crypto-market intermediaries more explicitly into its existing regulatory framework.
The later coverage shows how unsettled that framework remained: the SEC subsequently rescinded a proposed DeFi recategorization rule and later launched Project Crypto to modernize securities rules for crypto-based trading. This comment process is therefore an important marker in a contested, evolving policy path rather than a settled endpoint.
First-order effects
Digital-asset and DeFi exchange operators gain a new opportunity to contest or shape the proposal’s scope, while facing clearer notice that the SEC may treat their activities as exchange-like.
The SEC strengthens the record behind a possible rulemaking by explicitly identifying digital-asset and DeFi exchanges as within the proposal’s intended reach.
Second-order effects
Platforms, legal advisers, and crypto issuers may need to reassess whether trading, matching, or other market functions could trigger exchange-related compliance exposure if the proposal advances.
Explicit coverage puts pressure on decentralized-market designs to distinguish technical infrastructure from activities regulators could characterize as operating an exchange; the public-comment process also makes the eventual boundary a focal point for industry advocacy.
Third-order effects
The episode points to a longer fight over whether crypto market infrastructure can be governed by adapting securities-market rules or requires a distinct framework—a divide later reflected in the SEC’s rollback of the DeFi proposal and its Project Crypto modernization effort.
If agencies repeatedly revise crypto rules across administrations, regulatory durability may depend less on individual proposals and more on clearer statutory or broadly supported regulatory definitions.
The trend: Crypto regulation is moving from broad enforcement and disclosure capacity toward an ongoing effort to define which intermediaries and protocols belong inside conventional market-rule structures.
In addition to ironing this t-shirt (which republishes code from a comment letter), will I need to register as an exchange before wearing it? “It depends,” per the SEC's latest release: https://www.sec.gov/... https://twitter.com/...
Does public input even matter anymore? Seems to me the SEC is threatened by decentralized DeFi platforms and wants to regulate them the same as exchanges. In other words, they want into our cookie jar with those filthy, greedy overreaching hands. NO WAY https://www.reuters.com/..…
“Rather than embracing the promise of new technology as we have done in the past, here we propose to embrace stagnation, force centralization, urge expatriation, and welcome extinction of new technology. Accordingly, I dissent.” - SEC Commissioner Peirce https://www.sec.gov/...
I, for one, find it outrageous that the Securities and Exchange Commission thinks it should be regulating exchanges that trade securities. Scope creep much? https://twitter.com/...
Consider politely telling SEC to respectfully GFY, with as much detailed nuance as Chat-GPT behaving with high-born gentleman scholar prompt lolz https://twitter.com/... https://twitter.com/...
Just when I thought the SEC couldn't dig any deeper into their absurdity quagmire, it managed -again- to find new absurdity paradigms. https://twitter.com/...
@boironattorney @RichardHeartWin SEC reopened public comments. Note that comments are added to the public record will not be redacted. https://www.sec.gov/... https://www.sec.gov/... https://www.sec.gov/...
We made these cards from an NFT. Are we a bank now? Or do we register as an exchange as well? “To be or not to be, that is the question”. The SEC are Shakespeare fans for sure, and just as poetic. This is becoming painful to watch. https://twitter.com/... https://twitter.com/...
“Facts and circumstances.” Not the certainty that regulations should strive for, or that businesses and other (potentially) regulated parties require. https://twitter.com/...
Tldr The SEC 🇺🇸 is uninterested in facilitating innovation and competition in the financial markets and instead seeks to protect its incumbents 🏦 https://twitter.com/...
I think the time has come for anyone serious about crypto to expatriate to a more forward-looking nation there is just no turning the ship around at this point https://twitter.com/...
“Make no mistake: many crypto trading platforms already come under the current definition of an exchange and thus have an existing duty to comply with the securities laws.” - SEC Chair Gensler https://www.sec.gov/...
1/ 🚨 Today, the SEC voted 3-2 to reopen the comment period for amendments to Reg ATS and voted to reiterate the applicability of “existing rules to platforms that trade crypto asset securities, including so-called “DeFi” systems” 🧵 https://www.sec.gov/...
If correct, that would be one of the most dangerous (and frankly dumb) moves the SEC could make. Gensler is so hell bent on his career path that he is willing to hinder the US economy. This move would have huge impacts for both defi and tradfi. https://twitter.com/...
The SEC (and other regulators) can “increase scrutiny” all they wish. Defi is not subject to political scrutiny. It is subject only to pull requests. https://www.theblock.co/...
“The release fails to recognize the protections that come with decentralized, open-source protocols, and to consider whether such protections might obviate the need of some or all of the protections of the securities laws.” https://twitter.com/...
What the SEC is doing with crypto regulation amounts to the equivalent of some regulator stifling the new-born automobile industry back in the early 20th C by prohibiting the laying of tar roads because only cobblestone roads are allowed. https://twitter.com/...
Consistently impressed by the thoughtfulness of SEC Commissioner @HesterPeirce. From her dissent regarding how the current SEC Commission is responding to entrepreneurs (particularly in crypto): https://www.sec.gov/... https://twitter.com/...
“Rather than embracing the promise of new technology as we have done in the past, here we propose to embrace stagnation, force centralization, urge expatriation, and welcome extinction of new technology. Accordingly, I dissent.” -@HesterPeirce A MUST READ 👏 https://twitter.com/..…
🚨NEW: SEC Commissioner @HesterPeirce dissents the agency's proposal to amend the definition of an exchange to include DeFi platforms. Read her full statement here 👇🏼 https://www.sec.gov/...
SEC end game is no doubt to force the developers of open-source peer-to-peer software protocols to register as national securities exchanges and broker-dealers. An impossible task. This will only serve to drive defi offshore. https://twitter.com/...
1/ 🚨The SEC conducted its Open Meeting in which they voted (3-2) to reopen the comment period for proposed amendments to Rule 3b-16 under the Securities Exchange Act of 1934 regarding the definition of “exchange.” https://www.sec.gov/... 🧵🧵🧵
Today we reopened the comment period & provided supplemental information on proposed amendments to the definition of “exchange” under Exchange Act Rule 3b-16. More: https://www.sec.gov/...
sounds like the SEC is poised to approve last year's widely protested Reg ATS amendments that shadow-covered DeFi without reopening comment period or paring that part back what a nightmare https://www.theblock.co/...