The title “Crypto Mom” is held by no other person than Hester Peirce, a commissioner in the US Securities Exchange Commission. The commissioner has raised an alarm that the DeFi ecosystem is under threat. This warning is coming after a new proposal was submitted by the SEC. Crypto mom noted that the 654 pages suggestion would encompass all trading systems, including DeFi protocols.
Peirce is well known for her support and stand on crypto protocols that would favor crypto. As a result, her recent alarm calls for urgent attention.
Details Of SEC’s Proposal
According to Bloomberg, the Securities Exchange Commission (SEC) wants the meaning of “exchange” to be modified. There is an existing definition of the term in the commission’s Act of 1934.
Merely looking at the proposal, there was no mention of the crypto or DeFi community. Still, Peirce announced that changing the world’s definition would affect users of Decentralized Finance in the long term. The request proposed by the commission has words and phrases that would affect cryptocurrency.
It is no news that the leader of SEC, Gary Gensler, has been fighting to regulate the cryptocurrency market. There has always been severe opposition from institutions trying to control crypto activities.
Report From Gary Gensler
According to the Chairman of SEC, the request is focused on organizations that bring sellers of securities and buyers together using channels and unregulated systems of trading.
The formal request has a long route before it is registered in the Federal register, therefore binding on all those affected. This is because the suggestion would have to be approved by different commissioners before it can be passed into law.
The crypto society can count on crypto Mom to stop the approval of the request, but it is not going to be easy. This is because the suggestion will affect other financial institutions. These financial institutions will be checked if the proposal is passed into law, but doing so will also affect Decentralized Finance. Other commissioners may have no choice but to stand with the new suggestion from SEC.
One thing is sure, the crypto industry and the DeFi community will continue to experience more suggestions for regulations under the Gensler administration. The warnings of Peirce should not be taken callously.
It is not yet clear what steps members of the crypto industry can take concerning the recent regulations shot at them in the past months. Crypto lovers can only hope that more stringent rules do not come in the future.