"Hey, the SEC is really strict with crypto , you can't just chill."
The Securities and Exchange Commission (SEC) implemented new rules which widens its reach to include cryptocurrency market participants involved in digital asset transactions considered securities including falling under the financial sector decentralized.
The move aims to strengthen investor protection as it brings about major changes to the way liquidity providers in the crypto space conduct business that require them to register as dealers or dealers in government securities under certain conditions.
So here can be seen the individual who runs activities of buying and selling digital asset securities to provide liquidity into the crypto market are now required to register and comply with current securities regulations.
However, it is necessary to know the implications of the regulation in the DeFi ecosystem affect the automated market maker (AMM) and the DeFi protocol the other follows the AMM that facilitates trading through liquidity pools locked in a smart contract now under scrutiny.
The streak, anxiety in the crypto industry has been sparked and this has caused many criticized the SEC's rules which is considered excessive in imposing traditional securities laws on the DeFi space.
High-profile responses from organizations such as the DeFi Education Fund and the Chamber of Digital Commerce showcased their frustration at what many viewed as the crypto space's lack of clarity, engagement and regulatory guidance from the SEC.
While the rule was adopted by the opposition, in particular Commissioner Hester Peirce was outspoken about her doubts and he wondered whether want to apply such rules to software protocols such as AMM.
The debate in the SEC reflects the broader uncertainty on the appropriate way to integrate the rapidly growing crypto market into the existing regulatory framework without stifling innovation or undermining investor protection.
