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Hester Peirce Warns Proposed SEC Reform of Securities Trading Platforms Could Threaten DeFi
"Crypto Mom" believes a new 654-page plan designed to add oversight to trading government securities could also allow new powers to scrutinize DeFi platforms.
Updated May 11, 2023, 6:36 p.m. Published Feb 1, 2022, 3:32 p.m.
U.S. Securities and Exchange Commission (SEC) Commissioner Hester Peirce has warned that plans by the agency to reform government securities trading could threaten decentralized finance (DeFi).
- Affectionately referred to as "Crypto Mom" for her longstanding support for the industry, Peirce believes a new 654-page plan designed to add oversight to trading government securities could also allow new powers to scrutinize DeFi platforms.
- The new rules proposed by the SEC are designed to force platforms not registered as exchanges that still deal in the trading of all types of securities to register as "communication protocol systems."
- "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," Peirce said in an emailed statement, according to a Bloomberg report Tuesday.
- “The proposal could reach more types of trading mechanisms, including potentially DeFi protocols," Peirce wrote.
- SEC Chair Gary Gensler has said previously that DeFi is not immune from oversight by the markets regulator, since projects that reward participants with incentives or digital tokens could enter into territory that is subject to SEC regulation.
Read more: Professor Gensler Gets an F on Crypto
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