Paradigm's special counsel, Rodrigo Seira, and policy director, Justin Slaughter, have criticized the Securities and Exchange Commission's (SEC) redefinition of an exchange, stating that it needs to start over. They argue that the SEC should withdraw its proposed amendments and engage with the DeFi industry to arrive at a valid regulatory approach.

Paradigm also highlighted the issue of lumping centralized and decentralized exchanges under one umbrella, resulting in vague terms. The recent SEC lawsuit against Coinbase for violating securities regulation could have significant consequences for the crypto industry, as other exchange giants follow a similar structure.