Bitcoin and other cryptocurrencies ended an uneventful week on a high note. The price of bitcoin is up 3.2% today. The price of ethereum is up 8%. BNB is up 3.8%, cardano is up 2.8%, XRP is up 2.7%, and solana is up 8.5%.

Meanwhile, SEC regulators are conspiring to ambush the cryptocurrency market with "Trojan horse" regulation.

Last week, the Securities and Exchange Commission launched a seemingly unrelated 654-page plan to regulate "Treasury marketplaces. However, pro-cryptocurrency Commissioner Pierce warned that this is a comprehensive cryptocurrency regulation in disguise. While the proposal does not mention cryptocurrencies, its new rules would allow regulators to investigate cryptocurrency platforms and even decentralized financial (DeFi) protocols.

Gary Gensler, Chairman of the U.S. Securities and Exchange Commission

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According to Bloomberg, Peirce wrote in an email, "The proposal includes very broad language that, combined with the Chairman's apparent interest in regulating all cryptocurrencies, suggests it could be used to regulate cryptocurrency platforms." She added, "The proposal could involve additional types of transaction mechanisms, including a potential DeFi protocol."


Technically, the SEC is proposing to "extend the ATS rules to alternative trading systems (ATSs) for trading government securities, NMS stocks, and other securities," to "extend the SCI rules to ATSs for trading government securities," and to "amend the SEC rules relating to trading in government securities". Definition of "Exchange".

According to SEC Chairman Gary Gensler, the amendments are intended to close a "regulatory gap" created by trading platforms that are not registered with the SEC as exchanges or broker-dealers. He also noted that the proposed rules would expand on existing rules regarding platforms for trading Treasuries and other government securities.

The proposal would bind these platforms to register and be regulated, which would "promote resilience and greater access to the U.S. Treasury market.

However, Peirce believes this extension of the exchange definition could also serve as a backdoor cryptocurrency regulation. In an interview with Yahoo Finance, she said, "The broad definition proposed for exchanges would cover many potential platforms that don't think they would necessarily be covered, and in the traditional security space as well as in the cryptocurrency space."

This is in line with the SEC chairman's position on stricter DeFi oversight. In an interview with the Wall Street Journal last year, Gensler said DeFi platforms are not exempt from market regulation: "Even though they are decentralized and there is no central entity in charge, DeFi programs that reward participants through incentives or digital tokens may enter the market. This is regulated by the SEC."

Looking ahead

Beginning Jan. 26, blockchain industry insiders, trading platforms and other insiders will have a 30-day window to comment on the SEC's proposed new plan.

Peirce believes that this is an unusually short comment period for such an important regulatory proposal. Coupled with Biden's recent executive order, this may reflect a growing desire by regulators to tighten their grip on exploding decentralized financial markets.

After the comment period ends, the SEC will vote again to reach a final decision. If passed, the amendment will give the SEC entirely new powers to regulate cryptocurrencies and DeFi platforms.

Staying ahead of cryptocurrency trends while in the market ……

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