Hester Peirce, Commissioner of the US Securities and Exchange Commission (SEC), has issued her opinion on the institution’s recent attempts to change the definition of “exchange” under the Stock Exchange Rule of Law. According to Peirce, the institution is now broadening its reach to solve “problems that don’t exist,” stifling innovation in the process.
SEC Commissioner Hester Peirce Issues a Dissenting Opinion
US SEC Commissioner Hester Peirce, also known in cryptocurrency circles as “cryptocurrency”, has written a letter criticizing the Commission’s recent decision to amend the definition of “exchange” under the Rule of the Exchange Law. Peirce claims that instead of driving innovation, this decision will “kaput” it, causing even more confusion in cryptocurrency circles in the US.
Peirce argued that compared to the SEC of the 1990s which acted differently, today’s SEC uses the rulemaking process as a threat. She commented:
Today’s Commission tells entrepreneurs trying to do new things in our markets to come in and register. When entrepreneurs find they cannot do so, the Commission rules out making practical adjustments to our registration framework to help entrepreneurs register and instead rewards their good faith with enforcement action.
Two US-based crypto exchanges, Kraken, which has already settled a case with the institution, and Coinbase, which received a notice from Wells, have complained about this course of action by the SEC.
Peirce also referred to the lack of detail regarding the applicability of these new standards to defi structures, commenting that the standard does not even consider whether compliance for these platforms would be possible.
SEC Decision
The cause of this dissent lies in the introduction of complementary information to the definition of “exchange” in the Regulation of the Exchange Law, aimed at clarifying which cryptocurrency structures are under the umbrella of the agency.
While the amendment takes aim at defi platforms and how they can be regulated under this new proposal, SEC Chairman Gary Gensler clarified that many of these platforms are already covered by existing rules. He fixed:
Make no mistake: many crypto trading platforms already fall under the current definition of an exchange and therefore have a duty to comply with securities laws. Investors in crypto markets should receive the same proven protections that securities laws provide in all other markets.
The commentators will have a period of 30 days to send their ideas and doubts to the institution, which will be discussed and potentially applied to the amendment.
What do you think of Hester Peirce’s position on changing the definition of “exchange”? Tell us in the comment section below.
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