The U.S. Securities and Exchange Commission (SEC) requires market participants with significant liquidity-providing roles to comply with federal securities laws. crypto coins gave approval to adopt regulatory coverage rules.
The SEC voted 3-2 in favor of adopting the rulemaking at its meeting today. The 247-page regulation will apply to individuals trading in crypto assets that meet the definition of securities or government securities, except for those with assets under $50 million. Based on the adopted rule, the rules are expected to impact decentralized finance (DeFi).
The new rules include the following statements:
“If a person’s trading activities in crypto asset securities, including products, structures and activities in the so-called DeFi market, meet the definition of ‘as part of a normal business’ as set forth in the final rules and no exceptions or exemptions apply, that person will need to register as a broker or government securities dealer.”
The crypto industry had previously rejected the rule in comment letters to the SEC after it was first proposed in March 2022. Some commenters argued that the rule was unreasonable for DeFi products because they lack a central control body and are merely software.
SEC Chairman Gary Gensler noted the $50 million exception limit and stated that there is demand for the rule in both the crypto and non-crypto space.
*This is not investment advice.
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