Oct. 15, 2023
To Whom It May Concern: I am writing to express concern regarding the proposed rule change on the definition of "exchange" under the Securities Exchange Act of 1934 and Regulation ATS. While I understand the goal of bringing enhanced regulatory clarity to cryptocurrency and blockchain networks, I believe the rule as currently drafted sweeps far too broadly. Specifically, I am troubled by the notion that software developers and individuals merely using decentralized smart contracts could fall under the definition of an exchange. This excessive scope fails to recognize the core difference between centralized exchanges that custody assets and public blockchain networks with no central intermediary. Classifying open source software developers and general users of decentralized protocols as exchanges just because transactions technically run through smart contracts on a blockchain is highly impractical. These individuals have no control over the networks and cannot reasonably be expected to register as regulated trading venues. I urge narrowing the scope of the proposed rule change so it appropriately targets centralized entities actively facilitating securities transactions. Casting such an excessively wide net would stifle software innovation and curtail participation of regular Americans in decentralized networks. It is vital the SEC does not inadvertently penalize those contributing to open blockchain infrastructure. Thank you for the opportunity to comment on this important policy discussion. I hope these concerns will be thoughtfully considered before any final rulemaking. Sincerely, Asanka