The United States Securities and Exchange Commission (SEC) has stepped up its regulatory efforts targeting the crypto and Decentralized Finance (DeFi) sectors with new rules imposing registration requirements on “dealers” and “government securities dealers.” While SEC Chair Gary Gensler defends these measures as crucial for investor protection and market integrity, Commissioner Hester Pierce has voiced strong opposition. The newly adopted rules refine the definition of “dealers” and “government securities dealers,” requiring registration with the SEC, SRO membership, and compliance with federal securities laws. However, Commissioner Pierce argues that these rules distort market behavior and quality, diverging from existing statutory frameworks. She criticizes the broad scope of the rules, categorizing market participants solely based on liquidity-providing activities, which she believes penalizes liquidity provision and may reduce market competition. Pierce calls for revised regulations, highlighting existing surveillance mechanisms that facilitate regulatory oversight without burdening liquidity providers. She warns of implementation challenges and lack of clarity, urging for stakeholder feedback on a substantially revised version of the rules. Ultimately, Pierce emphasizes the need for a more predictable regulatory process that avoids arbitrary outcomes and supports market innovation. (Source: Bitcoinist)
