Coin Center has vigorously opposed the controversial SEC proposal to redefine “exchange” in the Securities Exchange Act to include systems that allow for non-firm trading interests and communication protocols to bring buyers and sellers together.
Coin Center, a Washington-based non profit that focuses on cryptocurrency policy, has filed a comment letter to the United States Securities and Exchange Commission. The proposal of the commission, according to the crypto lobby, violates the First Amendment by requiring open source developers to work behind projects within the ecosystem to have a license to talk.
“It’s unconstitutional and they should change it”
The motivations of think tanks and crypto lobby organizations to reject the SEC’s proposal is in the context of tighter oversight by the country’s regulators.
The agency published Amendments Regarding “Exchange” last month. Experts believe that it aims to bring crypto and, most importantly decentralized finance (DeFi), into its regulatory framework. This will dramatically change the risk profile of operating projects in the US.
Coin Center’s comments letter stated that while developers and publishers would be affected, republishers and republishers would not.
“A new SEC proposal contains a significant change in its complex language. Bottom line: This proposal is against the First Amendment. It requires a license for speaking, even for open-source developers. They should amend it as it is unconstitutional. Coin Center is retaliating.”
The Definition of Exchange
Peter Van Valkenburgh, the non-profit’s director of research, stated that the proposal was “unconstitutional” so that it should be withdrawn by the SEC.
Because the 200-page document doesn’t mention crypto or DeFi, the regulatory authority’s definition of “exchange”, is considered too broad. Coin Center also cited the precedent of the Supreme Court (SC), which could force the SEC to withdraw its proposal if it adopts the final rule.
Coin Center stated that the Commission must narrowly define “exchange” in order to make the proposal true professional conduct. Failure to do so would cool down significant protected speech and could stifle innovation. The country also faces an unfriendly Court, which the lobby believes is “primed” to uphold the First Amendment freedoms.
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