A U.S. Securities and Exchange Commission commissioner has expressed concerns about a proposal that would give the securities regulator new powers for regulating cryptocurrency platforms and decentralized financial (defi), protocols.

New SEC Proposal Could Hurt the Crypto Industry, Commissioner Peirce Cautions

Bloomberg reported Tuesday that

U.S. Securities and Exchange Commission Commissioner (SEC), Hester Peirce warned that a new proposal could have devastating effects on the crypto industry. Peirce, a pro-bitcoin Commissioner, is also known as “crypto mom .”

” in the crypto community.

Last week, the SEC proposed amendments in Regulation ATS to regulate “significant Treasury market platforms.” The 654-page proposal seeks to “expand Regulation ATS for alternative trading systems (ATS) that trade government securities, NMS [National Market System] stock, and other securities.” It also proposes to “extend Regulation SCI to ATSs that trade government securities” and “amend the SEC rule regarding the definition of an ‘exchange’ to address a regulatory gap.”

Commissioner Peirce cautioned that, although the proposal doesn’t mention crypto, it could grant officials broad new powers to examine cryptocurrency platforms, as well as decentralized finance (defi), protocols. She said:

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 pro-bitcoin commissioner stated that the proposal could be extended to more trading mechanisms, including possibly defi protocols .”

The securities watchdog claims the proposal is intended to close a “regulatory gaps” caused by market participants who use platforms that aren’t registered as brokerages or exchanges to trade all kinds of securities. Gary Gensler, Chairman of the SEC, stated last week that it would “promote resilience and greater access to the Treasury market

The public can now comment on the proposal. Before the regulations can become final, the SEC must have another vote.

Gensler has been vocal about the need to regulate cryptocurrency and defi platforms. In December, he added a crypto adviser to his executive staff. In January, the SEC chairman said, “If the trading platforms don’t come into the regulated space, it’d be another year of the public being vulnerable.”

Do you think the SEC should have more power to regulate crypto trading platforms and defi protocols? Comment below.

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