SEC Revisits Exchanges Definition as It Targets DeFi

The SEC has reopened the comment period for the public to weigh in on proposed amendments to the definition of exchange


AevanStock/Shutterstock modified by Blockworks


The SEC continues to push for decentralized finance platforms and digital asset exchanges to register with the agency. 

On Friday, April 14, the SEC’s five-member commission voted 3-2 to again reopen the comment period on amendments that would alter the definition of an exchange under the Exchange Act Rule 3b-16. 

According to the filing, the public has until June 13 to submit comments. 

The SEC originally proposed an expanded definition of what qualifies as an exchange back in January 2022. It claimed at the time that this was to “enhance transparency and oversight” over Alternative Trading Systems (ATS). The SEC defined ATS as entities that “trade Treasuries and other government securities under the regulatory umbrella.”

SEC officials have argued that various crypto firms would fall under the proposed definition.

“Make no mistake: many crypto trading platforms already come under the current definition of an exchange and thus have an existing duty to comply with the securities laws. Investors in the crypto markets must receive the same time-tested protections that the securities laws provide in all other markets. I welcome additional public comment on all aspects of the proposal in light of the information in this supplemental release,” SEC Chair Gary Gensler said in a statement.

In May 2022, the commission reopened its comment period, extending the time period that the public is able to weigh in on the proposals. The period of that extension closed in June.

“The SEC benefits greatly from hearing from the public on proposed regulatory changes. Commenters with diverse views have noted that they would benefit from additional time to review these three proposals,” Gensler said. 

In addition to changing regulatory language, the SEC continues to boost its cryptocurrency crime department as the agency cracks down on digital assets. 
According to a tweet from the SEC’s careers handle, the commission is looking to hire three new general attorneys in New York, San Francisco and Washington, DC.

Get the day’s top crypto news and insights delivered to your email every evening. Subscribe to Blockworks’ free newsletter now.

Want alpha sent directly to your inbox? Get degen trade ideas, governance updates, token performance, can’t-miss tweets and more from Blockworks Research’s Daily Debrief.

Can’t wait? Get our news the fastest way possible. Join us on Telegram and follow us on Google News.


upcoming event

MON - WED, MARCH 18 - 20, 2024

Digital Asset Summit (DAS) is returning March 2024. This year’s event will be held in our nation’s capital, where industry leaders, policymakers, and institutional experts will come together to discuss the latest developments and challenges in the ever-evolving world of cryptocurrency. […]

upcoming event

MON - WED, SEPT. 11 - 13, 2023

2022 was a meme.Skeptics danced, believers believed.Eventually, newcomers turned away, drained of liquidity and hope.Now, the tide is shifting and it’s time to rebuild. Permissionless II is the brainchild of Blockworks and Bankless. It’s not just a conference, but a call […]

recent research

Curve's Stablecoin and Lending Market


AMMs are at the root of everything elegant and useful in DeFi.That's why Curve put LLAMMA at the center of its lending protocol.



Five years after the ICO boom and bust, the notion of traditional finance assets existing on the blockchain is not nearly as far fetched


The Fahrenheit Consortium beat out competing offers from Novawulf and BRIC


A research paper modeled the reliability and carbon footprint of crypto mining in Texas


Bring in the next million developers, and then we can start worrying about where to find the next billion users



Web3 real estate investing platform Parcl leverages blockchain to address the current bottlenecks facing property investing


Over 130 family office professionals surveyed noted a 90% client interest in crypto, a finding at odds with Goldman Sachs earlier this month