The Blockchain Consensys software company submitted a letter to the American Securities and Exchange commission (SEC) urging the withdrawal of a proposed definition of definition which could classify the DEFI protocols in the context of the exchange of securities. The Blockchain Company based in the United States is opposed to this motion, citing concerns about regulatory surpassing and violations of American basic constitutional amendments.
Consensys warns dry: the proposed exchange rule violates American law
In a recent submission to the working group on the Crypto de la SEC led by Commissioner Hester Pierce, William C. Hughes, Senior Consensys lawyer has highlighted several reasons for the Commission to withdraw its proposed change to the definition of ” ‘Exchange “under the American law on securities.
First, Hughes explains that the change of rule proposed goes beyond what the American Congress wanted in the definition of an “exchange” under the EXCHANGE ACT SECURITIES of 1934 as a market for buyers and sellers of titles. Rather, these modifications aim to include platforms such as DEFI protocols whose tools are used passively by traders in negotiations and trade agreements.
In addition, the Executive of Consensys argues that the changes violate the Act to the Administrative Procedure (APA). Indeed, the SEC did not take into account the key points raised in the public commentary in 2022, which indicated that the decentralized protocols if they were classified as an exchange will probably not meet the operational requirements of the Commission. This indicates an unshakable predetermined objective of prohibiting these projects in the United States.
Another point raised by Hughes is that the proposed rules of rules also have no real advantage other than the extension of the regulatory authority of the dry. The lawyer and former DOJ officer explains that there was no sufficient cost analysis of these amendments which captured all of the blockchain projects which would be affected by the change of definition.
A declaration of the petition of consensys can be read as follows:
In the context of an initial question, the number of entities which would be affected by the modifications is considerably undercomputability: we are told that there would be only 35 to 46 new rules 3B-16 (a), between 15 and 20, whose digital assets negotiate. 88 Fed. Reg. At 29465, 29474. This number is far too low when, especially given the extensive but amorphous scope of modifications, when we are dealing with an ecosystem with hundreds, or even thousands of projects and protocols.
In addition to these points, the main advisor of the Conesnys also underlines that the modifications of the SEC are in direct violation of the first amendment because they aim to cover “badly” all the “communication protocols” between the parties having a commercial interest independently of ‘An affirmative verbal action. Hughes declares that the change of rule proposed does not manage to clarify terms such as “communication protocols”, and “the level of causality required for a group to be deemed to be” (gather) “of individuals with commercial interests ”, among other violation of the regular procedure concerning the fifth amendment.
Ansensys requests that the dry crypto working group examines these points and affects the immediate deletion of this change in definition of the regulatory agenda.
Presentation of the cryptography market
At the time of writing the editorial staff, the cryptography market is estimated at 3.11 billions of dollars reflecting a loss of 1.70% in the last day.
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