Apr. 21, 2023
April 21, 2023 I am writing to express my concern regarding the proposed changes to the definition of an exchange and the associated disclosures. As an EU citizen, I wanted to take this opportunity to comment on this regulation because of its potential impact on the future of decentralized finance (DeFi) in the US, which has far-reaching implications for the world. DeFi platforms are fundamentally different from traditional exchanges due to their decentralized nature and the use of autonomous smart contracts, which protect participants in unique ways. The Securities and Exchange Commission's rules and regulations are intended to safeguard investors in conventional financial markets, where intermediaries play a crucial role in ensuring compliance and preventing fraud and manipulation. However, DeFi's use of smart contracts eliminates intermediaries and enables users to transact directly with one another, simplifying traditional financial services and reducing the need for trust in intermediaries. This also makes it challenging to apply traditional regulatory frameworks to DeFi. Therefore, I suggest that the SEC consider exploring new definitions and disclosures that are better tailored to the distinct characteristics of DeFi. Imposing unnecessary or unfeasible tasks on unintermediated transactions via code could stifle the growth and innovation of US DeFi. Thank you for your attention to this matter.