The SEC has passed new regulations that may bring DeFi under a broader regulatory framework

ChainCatcher news, according to Cointelegraph, the U.S. Securities and Exchange Commission (SEC) passed rules on February 6 requiring more market participants to register with it, join self-regulatory organizations, and comply with federal securities laws and regulations. The new rules may bring cryptocurrencies and decentralized finance (DeFi) under a broader regulatory scope. The new rules were proposed in 2022 and span 247 pages. They redefine the terms "dealer" and "government securities dealer" in the Securities Exchange Act, as well as the phrase "as part of a regular business" used in the Securities Exchange Act of 1934.

These rules will apply to market participants that "play a significant role as liquidity providers in the market." Specifically, dealers under the new definitions may express "trading interest, that is, trading at the best available price or near the best available price on both sides of the market for the same security," or earn income "primarily by capturing the bid-ask spread, buying at the bid price and selling at the ask price, or by capturing any rewards provided by trading venues for providing liquidity." The SEC chairman stated in a statement, "These measures are common sense. Without exemptions or exceptions, if anyone's trading practices are consistent with those of an actual market maker, they must register with us as a dealer—this is in line with congressional intent."

There is a threshold for the applicability of the new rules. Dealers must own or control $50 million to be subject to the rules. These rules will take effect 60 days after being published in the Federal Register.