SEC Amendment to Securities Exchange Act Could Be a Bid to Rope in Crypto Markets

The United States Securities and Exchange Commission (SEC) put forward a proposed amendment to the Securities Exchange Act. Some discussion has emerged that it could have an impact on crypto and DeFi.

The United States Securities and Exchange Commission (SEC) has filed a proposed amendment to the Securities Exchange Act of 1934. The amendment calls for the definition of exchange to include,

“systems that offer the use of non-firm trading interest and communication protocols to bring together buyers and sellers of securities.”

It also calls for amendments to its regulations for Alternative Trading Systems (ATS) “to take into consideration systems that may fall within the definition of exchange because of the proposed amendments and operate as an ATS.” This has a potential impact on the crypto market, particularly software developers, according to Coin Center Director of Research Peter Van Valkenburgh.

Valkenburgh brought up regulations of providers of communications protocol systems as being one potential problem, stating,

“And while the addition of communication protocol systems is the most notable incursion into protected speech rights. Note also the subtle shift from ‘bringing together orders’ to ‘bringing together buyers and sellers’ and whether that implicates association and assembly rights.”

Some say that the changes are a bid to rope in the DeFi market. Other analysts say that SEC could run into problems on procedural grounds if the intent is to “capture the crypto world” and that the amendment isn’t targeting DeFi.

SEC wants to impose order on crypto market

The SEC has been putting more effort into policing the crypto market, with new developments in recent months highlighting a newfound urgency. The investigations even led to U.S. Congressman Tom Emmer and others asking the SEC for clarification on its crypto investigations.

Among other things, it has been targeting projects that may have violated securities laws and committed fraud. The Ormeus Coin founders were the latest to be charged in a $124 million fraud case. Ripple, meanwhile, is also in the middle of a protracted lawsuit with the SEC.

The SEC is also looking at the NFT market, which has obviously been a runaway success in terms of growth last year. With President Joe Biden’s executive order, it may have more authority to create a regulatory framework in conjunction with other government agencies, which signifies change on the way.