The U.S. Securities and Exchange Commission (SEC) has adopted amendments requiring participants in the DeFi sector to register as dealers. This decision has sparked criticism and confusion among crypto players and officials. The SEC expanded the definition of "dealer" to include a wider range of financial transactions, including those involving cryptocurrencies, supported by three out of five agency commissioners. The new rules compel market participants managing assets exceeding $50 million to register with the SEC.

The SEC emphasized that no type of securities, including digital assets, is exempt from the rules. The agency also noted that there is nothing in blockchain technologies and smart contracts that would prevent cryptocurrency activities from falling under dealer oversight. Despite proposals to exclude digital assets from the rules, the SEC decided that this would lead to negative competitive consequences, giving crypto firms an advantage over traditional organizations.

The rules will take effect in 60 days and will become fully operational in April 2025. Initially proposed by the SEC in March 2022, the amendments were criticized for their ambiguity and impracticality, particularly concerning the DeFi market. SEC documents note that automated market makers (AMMs) may require dealer registration, adding confusion to the regulation of other markets, including cryptocurrency securities.