SEC's Crypto Crackdown: DeFi, Exchanges, and Regulation in the Spotlight

The US Securities and Exchange Commission (SEC) has voted 3-2 to include decentralized finance (DeFi) in its proposal for a new exchange definition, indicating that crypto will be regulated under existing securities regulations. The move has disappointed the crypto industry, which had hoped for specific rules or guidance from the SEC. The SEC's decision to include DeFi in its proposal further underlines that the crypto financial movement won't get tailored regulations. The SEC has targeted trading platforms as unregistered exchanges, labeled a number of tokens, yield products and staking services as securities, and proposed a "best execution" rule that would include any firms trading crypto security tokens.