Blockchain Software Conszens has submitted a letter to the American Securities and Stock Exchange Commission (SEC), calling for the withdrawal of the proposed amendment to the definition that could classify DEFI protocols as part of securities exchanges. The State American company Blockchain opposes this conclusion, citing concerns about the overriding regulatory and violation of basic constitutional corrections in the USA.

Consensys warns SEC: The proposed exchange principle violates US law

IN Last application To the SEC task group under the leadership of Commissioner Hester Pierce William C. Hughes, a senior advisor at Conszensys, emphasized many reasons in which the Commission withdrew the proposed change in the definition of “exchange” in accordance with the US law.

First of all, Hughes explains that the proposed change in the principle goes beyond what the US Congress intended to define “exchange” on the basis of the Act on the exchange of securities from 1934 as a market for buyers and sellers of securities. Instead, corrections are aimed at covering platforms such as DEFI protocols whose tools are passively used by traders in negotiations and coming to trade contracts.

In addition, executive consensit claims that amendments violate the Act on the administrative procedure (APA). This is due to the fact that the SEC did not take into account the key points raised in the public commentary in 2022, which stated that decentralized protocols, if classified as replacement would not meet the operational requirements of the Commission. This indicates a non -service purpose, which is to prohibit these projects from the USA.

Another point raised by Hughes is that the proposed changes to the rules also do not show any single benefit in the real world except the extension of the regulatory body of the SEC. The lawyer and former officer of the Dojali explains that there was not enough cost analysis and the benefits of these amendments that have captured entire blockchain projects that would be affected by a change in definition.

Statement with Conszenss Petition is:

As an initial matter, the number of entities that would affect corrections is essentially inaccessible: we were told that the systems would only be 35 to 46 fresh rules 3b-16 (A), of which from 15 to 20. 88 Fed. Reg. at 29465, 29474. This number is definitely too low when, especially considering extensive corrections, but an amorphous range when we are dealing with an ecosystem with hundreds, if not thousands of projects and protocols.

In addition to these points, the senior adviser Consesnys also emphasizes that SEC changes are directly violating the first correction, because they are “improperly” covered by all “communication protocols” between the parties about the trade interest regardless of the oral action. Hughes states that the proposed change in the principle also does not explain the conditions such as “communication protocols” and “level of causes required so that the group is considered”[bringing] Together “people with trade interests”, which constitutes a violation of a proper process in relation to the fifth amendment.

He maintains that the SEC Task Group in the cryptor will consider these points and influenced the immediate removal of this definition of change from the regulatory program.

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