The United States Securities and Exchange Commission (SEC) recently extended the comments period for its proposal to amend Rule 3b-16 of the Securities Exchange Act of 1934. The Blockchain Association and Republican members of the House of Representatives Committee on Financial Services filed last-minute comments on the proposal.
The amendments proposal, released in January 2022, has drawn numerous negative reactions as it could profoundly impact the crypto industry. The 29 Republican committee members criticized the proposal for expanding the definition of exchange so much that it could capture a wide range of individuals, including software developers and participants in a blockchain network’s consensus mechanism, and exceed the agency’s regulatory authority with the inclusion of “Communication Protocol Systems.”
The Blockchain Association has submitted two sets of comments already, arguing that the SEC is exceeding its authority and citing the major questions doctrine, which the U.S. Supreme Court recently affirmed. The association also said that the broad language of the proposal could make validators part of an exchange, even though they operate competitively, and raises freedom of speech concerns.
Critics, including the Blockchain Association and Republican committee members, view the proposal as hostile to blockchain technology, despite the SEC’s claim of being “technology neutral,” and say its cost analysis is faulty. According to Blockchain Association CEO Kristin Smith, the SEC expands its jurisdiction beyond the limits originally set by Congress, while raising serious constitutional and Administrative Procedure Act (APA) concerns.
In addition to the Blockchain Association, other organizations opposing the SEC proposal include venture capital firm Paradigm and advocacy group Coin Center. SEC commissioners Hester Peirce and Mark Uyeda have also stated their opposition to the changes. These critics believe the proposal advances SEC chair Gary Gensler’s personal views “without adequate analysis or justification.”
It seems that the future of blockchain regulations and crypto markets is still up for discussion, and the many opposing views on this matter show that there is no easy path to consensus. While the industry faces challenges, the dialogue surrounding blockchain regulations and the evolution of securities exchange illustrates a larger debate about the changing world of finance and technology. As crypto enthusiasts, it is essential to keep updated about regulatory decisions that may impact the industry and continue to analyze their broader implications for the future of blockchain and digital assets.
Source: Cointelegraph
