House Republicans tell SEC to refrain from expanding defintion of exchange
Republicans on the House Financial Services Committee told the SEC: June 12 Withdraw the proposed rulemaking for virtual currency exchanges.
Republicans Oppose Expanding Definition
Specifically, lawmakers expressed concern over proposed amendments by the U.S. Securities and Exchange Commission (SEC) to broaden the definition of “exchange” under Rule 3b-16 of the Securities Exchange Act of 1934.
A Republican congressman wrote:
“Considering the goals of this proposed rule, it is clear that: [SEC Chair Gary Gensler] He uses this suggestion to push his own personal views on digital assets. “
Lawmakers suggested that the proposed rule change, if successful, could “capture a wide range of individuals,” including cryptocurrency software developers, blockchain consensus participants and decentralized finance (DeFi) systems.
Lawmakers said it was unclear why these parties would be considered exchanges under the securities law, and how the proposed rule changes would work, given that many parties do not have access to the data they need to comply. It added that it was unclear if it would be compliant.
Lawmakers also argued that the change would affect more of the cryptocurrency industry than the 15-20 platforms the SEC believes will designate as exchanges.
Lawmakers warn of impact
Republican lawmakers urged the SEC not to expand on Gensler’s frequently expressed view that many cryptocurrencies are securities for those cryptocurrency platforms. They warned that the proposed changes would “push” blockchain technology into outdated regulations rather than promote development and customer protection.
Lawmakers also said the SEC’s planned changes could “preempt” Congress’ attempts to legislate. In the House of Representatives he said two committees are working towards a market structure for digital assets. These plans are being discussed simultaneously at the hearing on June 13th.
The SEC’s proposed rule change has been under some form of consideration since September 2020, and has recently been opposed by Republican lawmakers.
SEC Commissioner Hester Peirce opposed the proposal because it was further developed. January 2022. Industry insiders, including Coinbase, have voiced their opposition as well. The SEC resumed commenting on the proposal in April 2023.
An article about House Republicans instructing the SEC to refrain from broadening the definition of exchange first appeared on CryptoSlate.
