US SEC will reconsider the definition of "exchange" that Coinbase executives have criticized previously

PANews March 11th news, according to IBTimes, the U.S. Securities and Exchange Commission (SEC) will evaluate a proposal that aims to determine the definition of an "exchange" to determine whether the definition can be modified to exclude entities or companies that allow cryptocurrency transactions, marking another shift in the SEC's new strategy in treating cryptocurrencies and digital assets.

SEC Acting Chairman Mark Uyeda said at the International Bankers’ Association’s annual Washington meeting on Monday that the regulator is considering a proposal that expands the definition of the term “exchange” to include it in a “communication protocol” without providing specific details. He said it was a "mistake" to link treasury market regulation with cryptocurrency industry regulation. Given his observations on the expanded definition of “exchange”, Uyeda said he had asked SEC staff to provide “the option to abandon part of the proposal.” If the "Communication Protocol" section is finally removed from the proposal, the protocol that provides the encryption service or solution will be excluded from the definition.

Uyeda's comments on the definition of SEC "exchange" echoed the comments of Coinbase's chief legal officer Paul Grewal. Grewal said in 2022 that regulators’ proposed rules could have a significant impact on decentralized finance (DeFi).