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SEC Approves New Dealer Rule, Targets DeFi

SEC extends its rules requiring more market participants, including crypto, and DeFi must register and comply with federal securities laws.

Claudia Fischer



sec impacts crypto

The Securities and Exchange Commission (SEC) is extending its rule for the Decentralized Finance (DeFi) sector by recently adding a new rule for dealers.  This new rule requires more from the crypto market participants including DeFi and crypto to register and comply with the legal framework of federal securities.

The SEC is stepping in to regulate the growing crypto and DeFi sectors in a more refined way. On February 6th, they introduced extensive new rules, changing how crypto markets are to be regulated by now on. These rules, laid out in 247 pages, show that the SEC is expanding its oversight to cover more market activities.

SEC Redefines the Rules for Dealer and Govt. Securities Dealer

The SEC has just made big changes to its rules, redefining who counts as a “dealer” or “government securities dealer.” This shakes up the Securities Act Rules. After the new improvised phrase in the Securities Exchange Act of 1934, the SEC now includes more entities that need to register and follow federal securities laws.

Also Read: SEC Seeks Ripple Documents for Legal Battle

This isn’t a small improvising step but a big change, especially for those who provide a lot of liquidity in the markets. If you’re involved in capturing bid-ask spreads or trading close to the best prices, the SEC might see you as a dealer now.

SEC’s Crackdown on Crypto and DeFi

This new rule isn’t just more paperwork for big players in the market rather it deeply affects the crypto and DeFi sectors. The SEC is broadening its scope to cover securities trading activities, regardless of the type of security traded. This means a large part of crypto trading and DeFi could fall under the SEC’s control, even though they’re digital or decentralized.

The debate over this rule change is intense. Some say it’s necessary to close loopholes and protect the market. Others, like SEC member Mark Uyeda, criticize it as overreach, raising concerns about the SEC’s interpretation of its role.Top of Form

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