PANews reported on March 11 that according to IBTimes, the U.S. Securities and Exchange Commission (SEC) will evaluate a proposal to determine the definition of "exchange" to determine whether the definition can be modified to exclude entities or companies that allow cryptocurrency trading. This marks another shift in the SEC's new strategy for dealing with cryptocurrencies and digital assets.

SEC Acting Chairman Mark Uyeda said at the International Bankers Association's annual Washington conference on Monday that the regulator is considering a proposal that expands the definition of the term "exchange" to include "communication protocols," but did not provide specific details. He said it would be a "mistake" to link Treasury market regulation with the regulation of the cryptocurrency industry. Given his observations about the expansion of the definition of "exchange," Uyeda said he has asked SEC staff to provide "the option to abandon parts of this proposal." If the "communication protocols" section is ultimately removed from the proposal, protocols that provide crypto services or solutions would be excluded from the definition.

Uyeda’s comments on the SEC’s definition of an “exchange” echo those of Coinbase Chief Legal Officer Paul Grewal, who said in 2022 that the regulator’s proposed rules could have a significant impact on decentralized finance (DeFi).