Paradigm criticizes SEC’s ineffective regulation of decentralized exchanges.

Crypto venture capital firm, Paradigm, has criticized the United States Securities and Exchange Commission’s (SEC) efforts to redefine the term “exchange”. The SEC’s proposed redefinition of the term “exchange” in the 1934 Securities Exchange Act would encompass decentralized exchanges (DEXes) and decentralized finance (DeFi) into the definition of an “exchange”. Paradigm has sent a 14-page letter to the SEC secretary, Vanessa Countryman, arguing that treating DEXs as “exchanges” under the Act is both “invalid and incoherent” due to fundamental differences between the two. The SEC’s planned revision of the legislation would bring DEXs under its purview, potentially regulating them as securities or stock exchanges, which Paradigm argues is inappropriate. The SEC has recently filed lawsuits against two of the world’s largest crypto exchanges, Binance and Coinbase, as part of its ongoing efforts to regulate the cryptocurrency market.