The Securities and Exchange Commission (SEC) is facing additional opposition to its proposed changes to the definition of a securities exchange. The Blockchain Association and Republican members of the House of Representatives Committee on Financial Services have submitted last-minute comments criticizing the proposal.
The proposal, released in January 2022, did not initially mention digital assets but was later expanded to include digital asset platforms. Many believe that these amendments could have a significant impact on the crypto industry and have received numerous negative reactions.
The Republican committee members express concerns that the proposal’s broad definition of an exchange could encompass various individuals, including software developers and participants in a blockchain network’s consensus mechanism. They argue that it is unclear how these individuals could comply with the regulatory requirements for an exchange.
The opposition letter suggests that the SEC’s proposal reflects a bias against blockchain technology and accuses SEC Chair Gary Gensler of advancing his personal views without proper analysis or justification.
The Blockchain Association has submitted two sets of comments, highlighting concerns about the SEC exceeding its authority and the potential classification of validators as exchanges, despite their competitive operation. They also raise freedom of speech concerns and criticize the SEC’s cost analysis.
Other organizations, including Paradigm and Coin Center, as well as SEC commissioners Hester Peirce and Mark Uyeda, have also expressed their opposition to the proposed changes.
The SEC’s proposal continues to generate debate and opposition, with stakeholders emphasizing the need for rules that consider the unique characteristics of decentralized protocols and entities while staying within the limits set by Congress.