SEC Commissioner Hester Peirce Criticizes Exchange Act as a Threat to Free Speech

U.S. Securities and Exchange Commission (SEC) commissioner Hester Peirce has voiced her concerns over the regulator’s new rules to amend the definition of “exchange”.

In her statement on April 14, Peirce criticized the SEC’s proposal and current leadership, accusing the commission of “aggressively expanding its regulatory reach to solve problems that do not exist.”

Peirce noted that the proposal seeks to embrace stagnation, force centralization, urge expatriation, and welcome the extinction of new technology. The SEC recently reopened the comment period for amendments to Exchange Act Rule 3b-16 Regarding the Definition of “Exchange” after several crypto firms questioned the proposed changes.

If implemented, decentralized platforms would be subject to SEC control. However, the ambiguity of the term “communication protocols” used in the amendments is a source of concern for many. SEC Chair Gary Gensler believes that the existing definition of “exchange” already covers many crypto platforms, including those claiming to be decentralized.

In her statement, Peirce also criticized the SEC for failing to define a “Communication Protocol System,” and imposing impractical standards for decentralized activity and those involved. She noted that the SEC failed to consider whether compliance is possible before making these rules, suggesting that this could be an attempt to regulate decentralized finance into nonexistence.