SEC commissioner Hester Pierce said the new rules harm not only the market participants who find themselves transformed into dealers, but also the broader market.
The United States Securities and Exchange Commission (SEC) adopted new rules on Feb. 6 that redefine “dealer” and “government securities dealer." First proposed in 2022, the new rules require more crypto market participants to register, join a self-regulatory organization, and comply with federal securities laws.
The new SEC rules have garnered much criticism from the crypto community, decentralized finance (DeFi) ecosystem, and pro-crypto politicians like Hester Pierce. Since the rules were first proposed two years ago, the crypto community has protested, citing a lack of clarity on the definition of crypto securities.
Most of the criticism stems from the definition of a dealer, which could force liquidity providers to register as securities dealers. Thus, all liquidity providers that control over $50 million in capital would need to register with the SEC.
