Ranking member of the United States House Financial Services Committee Patrick McHenry and ranking member of the Subcommittee on Investor Protection, Entrepreneurship and Capital Markets Bill Huizenga sent a letter on Monday to Securities Exchange Commission (SEC) Chairman Gary Gensler. The letter expressed concerns about the proposed SEC amendments to the Exchange Act of 1934 that would expand the definition of an exchange and the phrase “as a part of regular business.” The congresspeople said the changes could stifle innovation in the digital asset ecosystem.
Each said that they understand that communication protocol systems would be included in the definition of an exchange under lengthy new wording proposed on January 26. Communication protocol systems are not explicitly mentioned in the proposal. The redefinition drew fire from Coin Center last week. The crypto lobbying group said it would create a “speech-based definition” of an exchange and would impact decentralized exchanges by requiring them to be licensed. Coin Center claimed the change would be a violation of free speech.
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