The US regulator SEC is preparing for a stall that proposes that the rules governing traditional financial markets apply to DeFi altcoins as well. The decision that will emerge today may herald increased regulatory pressure on the DeFi market.
SEC brings more regulation to DeFi industry
The U.S. Securities and Exchange Commission is poised to dispel any doubt that they are planning to oversee decentralized finance (DeFi).
The Commission will propose today that the rules governing US commodity exchanges apply to DeFi as well. Such a move is not a change in the rules, but rather means that the current exchange rules will apply within DeFi. In a similar move in early 2022, the SEC expanded the lexical meaning of the word exchange and reported that it eliminated the “regulatory disparity” between traditional and decentralized finance.
The latest move will formalize its claim to jurisdiction over activities labeled as ‘decentralized’, which the SEC still sees under traditional definitions of securities trading. It also points to increased scrutiny by the regulatory body towards this area of cryptocurrencies. So far, the SEC has focused more on centralized crypto firms.
“Make no mistake: many crypto exchanges already fall within the current definition of an exchange and therefore have a current mandate to comply with securities laws,” Chairman Gary Gensler said in a statement prepared for Friday’s meeting. “Still, these platforms act as if they have a choice to comply with our laws.”
What’s next for DeFi altcoins?
DeFi projects that bring together multiple buyers and sellers to trade assets, including external and structured projects, may be considered stock exchanges by the SEC and may incur additional fees if they do not register as a national stock exchange or broker-dealer.
According to Gensler, the SEC does not intend to actually define DeFi in the rule, but will evaluate each case based on how activity is handled, including whether it has an agent and exactly what service that agent provides.
In the prepared statements, Gensler reiterated his view that “the vast majority of crypto tokens are securities” and that crypto exchanges already meet the current requirements for securities exchanges.
“These platforms match orders from multiple buyers and sellers of crypto securities using built-in, non-optional methods,” Gensler said, “This is the definition of the exchange, and most crypto exchanges today do not meet it. “Whether they call themselves centralized or decentralized, that’s the case,” he says.
These DeFi altcoins may be at risk
The crypto market has long been waiting for US rules that could bring certainty about how companies and activities should operate. But regulators have shown that in such a situation they cannot act as before.
Uniswap (UNI), Aave (AAVE), Compound (COMP), MakerDAO (MKR), Curve (CRV), SushiSwap (SUSHI), Yearn Finance (YFI), Balancer (BAL), Synthetix (SNX), and Avalanche (AVAX) , will now be more visible with the new design.
cryptocoin.comAs you follow, the SEC is currently awaiting Tron founder Justin Sun’s response to the lawsuit. Sanctions have been imposed on Binance and several central exchanges in recent weeks.
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