The SEC voted on Tuesday to adopt a rule requiring market participants with significant liquidity provision roles to comply with federal securities laws and include cryptocurrencies. The rule will apply to people who trade in cryptoassets that meet the definition of securities or government securities, except those with assets below $50 million. The rules will also impact DeFi “if a person’s trading activities in crypto-asset securities, including products, structures and activities involved in so-called DeFi markets, meet the definition of ‘as part of the regular business’ set forth in the final rule (i.e. the A person engages in a regular pattern of buying and selling cryptoasset securities that has the effect of providing liquidity to other market participants, as described in the Qualitative Standards) and no exceptions or exclusions apply, the person will be required to register as a dealer or Dealers in Government Securities. The final rule will be effective 60 days after publication in the Federal Register. The compliance date is one year after the final rule takes effect. The DeFi Education Fund said the SEC’s rulemaking passed on Tuesday was “misguided and unworkable.” Miller Whitehouse-Levine, CEO of the fund, said: “While the SEC acknowledged receipt of discussions about DeFi, including our concerns, the SEC not only failed to address the substance of our concerns, but also completely failed to clearly provide for DeFi market participation. They must chart any discernible path to compliance. Imposing obligations on entities that cannot comply is wrong, impractical, and hostile to innovation. said Cody Carbone, vice president of policy at the Chamber of Digital Commerce. Tuesday’s vote is “yet another example of the SEC’s continued hostility toward the digital asset industry.” Republican Commissioner Hester Peirce, who voted against the rule, took issue with some aspects of the rule at Tuesdays meeting. Peirce said: “The document doesn’t spend a lot of time talking about cryptocurrencies, but it does explain that under the final rule, automated market makers (AMMs) may have to register as traders. As far as I know, AMMs are just a software protocol, so it How to register as a dealer? An SEC official said in response to Peirce that AMM is more than just software. After some debate, Peirce asked how many people providing liquidity in AMM pools would be included in the regulation. An SEC official said: This market is not transparent or compliant, so we unfortunately dont have good data. (The Block)