Crypto venture capital firm Paradigm has slammed the United States Securities and Exchange Commission’s attempt to redefine the term “exchange” — which if accepted, would bring decentralized exchanges under its purview.
On June 8, the firm sent a lengthy 14-page letter to the SEC secretary, Vanessa Countryman, regarding the regulator’s proposed redefinition of the term “exchange” in the 1934 Securities Exchange Act.
The SEC plans to revise the 89-year-old legislation to encompass decentralized exchanges (DEXes) and decentralized finance (DeFi) into the definition of “exchange.” Because the term DEX contains the word “exchange,” the SEC wants to treat it the same as a securities or stock exchange.
Today, @paradigm commented on the @SECGov‘s proposed redefinition of “exchange”
Through haphazard rulemaking, the SEC inappropriately attempts to bring crypto trading platforms, including DEXs, under its remit and regulate them as securities exchangeshttps://t.co/ibv2u1n9VU
— Rodrigo (@RSSH273) June 8, 2023
Paradigm, however, argues that fundamental differences between DEXs and exchanges make treating them as “exchanges” under the Act both “invalid and incoherent.”
“It thus appears that after suing Coinbase for failing to do…
