In the United States, players in the field of decentralized finance were required to register as dealers

2 min readFeb 8, 2024

New rules requiring DeFi market makers to register as dealers have been approved by the SEC. This means that they will actually be equated to securities market players.

Automated market makers with more than $50 million in cryptocurrency assets will be forced to comply with securities laws.

“The commission is not excluding any particular type of securities, including crypto asset securities, from the application of the final rules. If anyone trades in a manner consistent with de facto market making, [they] must register with us as a dealer,” the regulator said in a statement.

Let us remind you that in DeFi protocols, unlike the conservative financial market, liquidity is provided by users who receive profit in the form of a percentage of commissions when concluding transactions.

Experts criticized the innovations, citing the fundamentals of DeFi platforms. Republican SEC Commissioner Hester Pierce also voted against the SEC initiative. According to her, automatic market makers are software code and cannot be registered as dealers.

“While some commenters stated that the proposed rules should not apply to so called DeFi, whether there is a dealer involved in any particular transaction or structure (whether or not referred to as so-called DeFi) is a facts and circumstances analysis. There is nothing about the technology used, including distributed ledger technology based protocols using smart contracts, that would preclude crypto asset securities activities from falling within the scope of dealer activity.”,” the department responded to criticism.

SEC Commissioner Gary Gensler explained that innovation is necessary to ensure investor protection.

“Absent an exemption or exception, if anyone trades in a manner consistent with de facto market making, it must register with us as a dealer,” the SEC chairman said.

Do you think the actions of the American regulator threaten the development of the decentralized finance industry?