Hester Peirce, a U.S Securities and Exchange Commissioner (SEC), popularly known as “Crypto Mom’ in the decentralized finance (DeFi) industry, has warned about the recently proposed crypto amendments from the SEC, arguing that they could potentially affect the functionality of exchange firms in decentralized finance (DeFi).
According to a February 01 Bloomberg report, Peirce argues that the 654-page proposal recently released by the SEC that intends to amend the definition of “exchange” as currently defined in the Securities Exchange Act of 1934 could potentially impact regulations of digital assets.
Nonetheless, the Crypto Mom has reportedly opposed the opening of the document for the public to comment, asserting that the move could impose additional regulations on decentralized finance, adding:
“The proposal includes very expansive language, which, together with the chair’s apparent interest in regulating all things crypto, suggests that it could be used to regulate crypto platforms.”
“The proposal could reach more types of trading mechanisms, including potentially DeFi protocols.”
Peirce hinted that the proposed document does not include terms such as “digital assets,” “cryptocurrency,” or “decentralized finance.” Instead, it focuses on systems that offer non-firm trading interests and communication protocol that brings together buyers and sellers of securities.
On January 26, while commenting about the proposed crypto amendments, SEC Chair Gary Gensler stated that rule change would promote resiliency and greater access in the Treasury market if implemented.
It is worth noting that SEC crypto enforcement has increasingly gone high in Gensler’s tenure in office. Previously, the SEC chair referred to the DeFi space as “highly centralized” in certain aspects. In that case, the recent SEC plans to impose similar regulation on projects considered as securities is purported to what Crypto Mom previously referred to as Gensler’s “interest to regulate all crypto.”
Enforcement is one of the fundamental pillars in achieving the @SECgov's mission.
One pillar is the policy framework — the laws set by Congress, & the rules enacted by the Commission.
But you've also got to examine against those laws & rules, & enforce those rules.
— Gary Gensler (@GaryGensler) January 12, 2022
Upon approval by SEC commissioners, the proposed document will be subjected to public comment for 30 days before being listed in the Federal Registry. The commission would take any submitted feedback into account.