Hester Pierce, popularly known as the crypto mom by the crypto community, has warned about a recent rule proposed by the US Securities and Exchange Commission (SEC). Pierce is a commissioner of the SEC.
According to Pierce, a newly proposed rule by the SEC posed a threat to the regulatory framework of firms that operated in the decentralized finance (DeFi) sector.
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SEC needs to offer clarity in a new rule
A recent report by Bloomberg noted that Pierce had called upon the SEC to amend a new rule. Pierce stated that the 654-page proposal from the SEC needed to offer clarity on the definition of an “exchange.” The SEC’s definition of an exchange in the new rule could affect the digital asset sector.
The report further noted that Pierce had refuted for the proposal to be opened to public comment, noting that the rule could introduce extra regulations on the DeFi sector.
“The proposal includes very expansive language, which, together with the chair’s apparent interest in regulating all things crypto, suggests that it could be used to regulate crypto platforms. The proposal could reach more types of trading mechanisms, including potentially DeFi protocols.”
The proposal also fails to clearly define cryptocurrency, digital assets, or decentralized finance. On January 26, the SEC chair, Gary Gensler, noted that if this change was implemented, it could “promote resiliency and greater access in the Treasury market.” Gensler noted that the rule would expand regulations into the Treasury market sector.
Crypto regulations under Gensler’s tenure at SEC
Gensler’s tenure at the SEC has been marked with a high level of crypto regulations. Between June and September 2021, crypto regulatory measures were significantly high. Gensler was confirmed as the new chair of the SEC earlier in 2021.
Gensler had earlier stated that the DeFi sector was “highly centralized.” Therefore, the DeFi space needed to be regulated similarly as the securities sector. Gensler has also been reluctant to approve a Bitcoin spot exchange-traded fund (ETF). In October last year, Gensler approved a Bitcoin futures ETF, saying that spot crypto ETFs were subject to manipulation.
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