Nonprofit blockchain advocacy group Coin Center has called the Securities and Exchange Commission’s (SEC) proposed redefinition of an “exchange” an “unconstitutional overreach.”
The lobby group made the comments in a written response to the SEC’s March 18 Amendments Regarding the Definition of “Exchange”, which details changing the meaning of “exchange” from a “system that brings together the orders” of a security to one that “brings together buyers and sellers.”
Bringing together orders, which are things, is very different from bringing together people and Coin Center says the latter is tantamount to coercion.
The rule change suggests that Communication Protocol Systems are also exchanges that may bring in programmers who merely share code for crypto trade. If the proposal becomes an SEC rule, decentralized exchanges (DEXes) such as UniSwap (UNI) and PancakeSwap (CAKE) would all be on notice that the commission wants them to register as exchanges.
A new SEC proposal has a serious change hidden within its complex language.
Bottom line: The proposal violates the First Amendment by requiring a license to speak—even of open source developers. It’s unconstitutional and they should change it.
Coin Center is pushing back 1/
— ɥƃɹnquǝʞןɐΛ ⚖ (@valkenburgh) April 14, 2022
Coin Center argues that this shift “to a speech-based definition” would impact “countless developers, publishers, and republishers” who may trade code but not tokens. This is particularly the case for…