Oct. 20, 2023
Hello, I am using this opportunity to provide my comments on the proposed amendments to the definition of "exchange" under the Securities Exchange ACT of 1934. I am a concerned regarding the expanded definition and guidance covers activities and platforms beyond what should reasonably be considered an exchange. Specifically, the analysis that "each person operating through a common enterprise could be views as participating in the operation of an exchange." This is overly broad and has is an infringement by attempting to regulate, control, and manipulate a human beings' rights to assembly and use speech. Taken literally, this could mean that every individual user of a decentralized smart contract protocol is participating as an exchange. Human beings interacting with a line of code does not make human beings something besides a human being. Human beings are exchanging published numbers with each other and are not doing so with permission of using a third party as a medium of exchanging published numbers. I suggest that DEFI platforms such as PulseX are not exchange platforms. Rather, they are decentralized software that anybody is able to run. It is code that is available to everyone to run and use. I propose that a better way to describe a decentralized exchange is as a data exchange. Before assuming that all digital assets traded on DEX's are securities, it is right to assume that each human is merely publishing code and exchanging this code with another human being. The decentralized exchange of data is no different from the way the internet currently works. A free marketplace used to exchange data. Why are online marketplaces like Facebook Marketplace and Ebay are not regulated as financial exchanges though these are marketplaces for the exchange of goods for services hosted on the internet, just as the blockchain is? Tokenized real-world assets or virtual assets on the blockchain, being tracked and exchanged on a DEX, are conceptually no different. I suggest the definition be narrowly tailored to centralized entities and platforms providing exchange like services, where regulation is far more feasible and appropriate. Activities, relationships and capabilities analysis should focus on the actual functions of platforms, not just technical structure. The intend should be providing flexible but reasonable oversight for centralized crypto trading platforms without sweeping in parties not actually operating exchanges. Clarification is needed that ordinary users of decentralized protocols do not automatically constitute exchanges. A more moderate approach to amending the exchange definition would enable regulators oversight where appropriate and in accordance to the Bill of Rights without restricting innovation. I hope the SEC strongly considers these concerns and feedback as it aims to strike the regulatory balance. I hope the SEC realizes its potential infringement on God given rights of Human beings living in on Earth. Thank You for the opportunity to provide input on this important issue. A displeased human being