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June 13, 2023

Crypto Platforms Must Fully Comply with the Securities Laws

WASHINGTON, D.C.—Legal Director and Securities Specialist Stephen Hall issued the following statement on the filing of Better Markets’ Comment Letter to the Securities and Exchange Commission (SEC) in response to the agency’s reopening of the comment period for its proposed rule regarding amendments to the definition of “exchange” and alternative trading systems or “ATS”:

“The SEC’s proposed amendments to the definition of an ‘exchange’ and to Regulation ATS must apply equally to all securities, regardless of how novel or ‘innovative’ those securities offerings may be, and that includes cryptocurrency offerings. This simple fact bears repeating: Most cryptocurrencies meet the definition of a security; hence cryptocurrency trading systems that facilitate the trading of such cryptocurrency securities must register with the SEC as an exchange or comply with Regulation ATS. The Commission must not be dissuaded from applying the broad statutory definition of an exchange to a variety of emerging platforms that perform what is in reality an exchange function. This is especially true given the deception, manipulation, and outright fraud we’ve seen in the crypto industry and the enormous damage it has inflicted on investors.

“We continue to support the SEC’s proposal to expand the types of platforms that must be regulated as an exchange, and nothing that has come to light in the re-proposals changes our view.  Carving out cryptocurrency securities from this proposed rule or the securities laws and regulations more generally would violate the SEC’s mandate to protect investors; maintain fair, orderly, and efficient markets; and facilitate honest capital formation. The SEC should not be swayed by the often-hyperventilated arguments from those representing the cryptocurrency industry and their apparent sense of entitlement to a perpetual regulatory sandbox or immunity.

“The proposed rule represents an important enhancement in the oversight of exchanges and ATSs. It will help the Commission’s regulatory framework keep pace with the increased use of electronic trading venues and other innovations in platforms that facilitate the purchase and sale of securities. The proposed rule will move our regulatory framework another step closer to full transparency, fair competition, and above all, stronger investor protections in the realm of exchanges, ATSs, and the associated activities of their broker-dealer operators, including cryptocurrency exchanges.”

Read our full comment letter here or click the button below.


Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit

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