The SEC is planning to amend old legislation to include decentralized finance exchanges, but Polygon and other DeFi platforms are objecting to the broad and harmful terminology that doesn't apply to decentralized blockchains. Polygon Labs submitted a response to the SEC's proposed rulemaking, stating that the new proposal threatens the existence of permissionless blockchain networks in the US.
The SEC believes that DeFi platforms and DEXs should be treated the same as securities or stock exchanges, but Polygon clarified that network validators cannot be considered a "group of persons" in the way the proposal suggests. The proposed amended rule would effectively be a ban on all permissionless blockchain networks in the US, including DeFi protocols.
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