A U.S. Securities and Exchange Commission (SEC) commissioner has criticised the regulator’s proposed amendments to the definition of “exchange.” Hester Peirce issued a statement on 14 April condemning the plan, and accused the SEC of using the changes to “embrace stagnation, force centralisation, urge expatriation, and welcome extinction of new technology.” Peirce expressed concern that the SEC failed to define a “Communication Protocol System” and used an ambiguous definition for platforms that use “communication protocols.” Peirce also criticised the SEC’s impractical standards for decentralised finance and failure to consider whether compliance was viable.
The SEC proposed amendments to Exchange Act Rule 3b-16 in January 2022, which suggested that platforms using communication protocols would fall under its remit. Gary Gensler, the SEC chair, argued that the existing definition of exchange already included many crypto platforms. The SEC reopened the comment period in response to objections from a number of crypto firms. Crypto stakeholders praised Peirce’s statement for highlighting the regulator’s strict stance on crypto.