In a move that has intensified the ongoing battle between the crypto industry and regulators, the United States Securities and Exchange Commission (SEC) has extended the comments period for its proposed amendments to Rule 3b-16 of the Securities Exchange Act of 1934.
The deadline, which was originally set for June 13, has been pushed back, allowing more time for stakeholders to voice their concerns.
One of the key highlights of the proposed amendments is the SEC’s failure to explicitly address digital assets in the initial release of the document.
However, a subsequent lengthy publication, issued during the reopened comment period, finally acknowledged the existence of digital asset platforms.
Notably, the proposal has attracted criticism from both the Blockchain Association and Republican members of the House of Representatives Committee on Financial Services.
The Republican committee members, in a last-minute filing, took issue with the expansive definition of an exchange, suggesting that it could encompass individuals such as software developers and participants in a blockchain network’s consensus mechanism.
They argue that the SEC’s regulatory authority could be overstepped by including “Communication Protocol Systems.”
In a scathing letter, the Republicans claimed that the proposal exemplifies the SEC’s hostility toward blockchain technology and accused SEC Chair Gary Gensler of advancing his personal views without proper analysis or justification.
The Blockchain Association, on the other hand, has submitted two sets of comments thus far, challenging the SEC’s authority and highlighting concerns related to the major questions doctrine, recently affirmed by the U.S. Supreme Court.
The association also raised the issue of the proposal’s broad language, which could potentially classify validators as part of an exchange, despite their competitive nature. Furthermore, the association expressed concerns regarding potential infringements on freedom of speech.
Joining the chorus of dissent are Paradigm, a prominent venture capital firm, and Coin Center, an influential advocacy group. Both organizations have voiced their opposition to the SEC’s proposed amendments.
In addition, SEC commissioners Hester Peirce and Mark Uyeda have publicly stated their disagreement with the proposed changes.
With the extension of the comments period, stakeholders across the industry now have more time to make their voices heard.
The outcome of this contentious debate will have a significant impact on the future of the crypto sector, and all eyes remain on the SEC as it navigates the delicate balance between regulation and innovation.