Good morning, and welcome to Protocol Fintech. This Monday: the SEC makes a move on DeFi, SWIFT action, and Hester Peirce on regulating code.
Off the chain
Bank runs in Moscow. Armies funded by DAOs. Avocado inflation. This year’s off to a chaotic start. The jitters over cutting Russian banks off from SWIFT, which Western powers seemed to overcome this weekend, were roasted on Twitter as a sign of cowardice. But maybe it was just caution. Our modern financial system is threaded together delicately. No one quite knows what happens when we start pulling it apart, even if the exigencies of war require it.
— Owen Thomas (email | twitter)
The SEC’s big DeFi move
Gary Gensler has been talking about taking on the crypto industry since he started last April. Now he’s getting down to business. The SEC is taking on the crypto industry in a way that could have far-reaching implications, particularly for DeFi, by expanding the agency’s regulatory authority over decentralized trading systems. The potential mechanism is a rule quietly proposed in January that would expand the definition of an “exchange” to include “communication protocol systems.”
This could be the SEC’s big move on crypto. The industry is taking notice.
- “It’s the biggest, most profound rule-making the SEC has ever had,” said Nicholas Losurdo, a partner at law firm Goodwin who previously worked at the SEC. “It has…
