Polygon Labs, the main blockchain know-how agency, issued a response at this time to a proposed rule from the Securities and Change Fee (SEC) that redefines the time period “trade.” The corporate argues that the proposed rule might pose a extreme danger to the existence of permissionless blockchain networks and decentralized finance (DeFi) protocols inside america.
The SEC’s reopening launch means that not solely DeFi software program protocols enabling particular transactions on a permissionless, distributed ledger must register as a nationwide securities trade (NSE) or another buying and selling system (ATS), but additionally, the underlying ledgers or networks. Additional, people or entities operating or sustaining such techniques would additionally have to register.
Polygon Labs has identified that the brand new rule could be logistically unworkable, given the construction of blockchain know-how. They spotlight that the quite a few unbiased validators of blockchain transactions can not virtually coordinate to register as an trade, and these validators, by design, do not management DeFi protocols.
The blockchain know-how agency additionally criticizes the SEC’s proposal for its technological bias. It asserts that the foundations are inconsistent, treating blockchain know-how in a different way from different technological infrastructures equivalent to cloud-based techniques. The SEC’s launch proposes that any a part of a blockchain-based system, together with validators, should register, in comparison with solely requiring the deployers of apps on cloud techniques to take action. This strategy, based on Polygon Labs, embodies a transparent technological bias.
In its response, Polygon Labs maintains that implementing the proposed rule would successfully ban all permissionless blockchain networks within the U.S., in addition to many software program protocols constructed atop such networks, together with DeFi protocols. The corporate’s critique underscores the excessive stakes at hand, drawing consideration to the potential impression of the SEC’s proposed rule on the way forward for blockchain know-how inside the nation.
The SEC has but to answer Polygon Labs’ critique, however this newest trade underscores the growing rigidity between regulatory our bodies and the blockchain business, as every navigates the complexities of recent applied sciences and their implications for monetary techniques.
