Requiring DEXes to register with SEC like other exchanges is impossible says Coinbase CLO

Published: 2023-06-14


1. Difficulty of Requiring DEXs to Register with SEC Coinbase CLO,Paul Grewal,recently commented on the impossibility of requiring decentralized exchanges (DEXs) to register with the SEC,implying that these exchanges differ greatly from centralized exchanges. According to Grewal,DEXs have inherently decentralized structures,which makes the task of registering them with regulatory bodies a dauntingly complex one. He further highlighted that the anonymity associated with DEXs and the prevention of IP tracking make it all the more difficult to monitor them.

2. The Growing Popularity of DEXs Due to their decentralized nature and some other technical benefits,DEXs are becoming increasingly popular among cryptocurrency traders. The attractiveness of not having to submit personal information is a unique selling point,which attracts privacy-focused users. Moreover,several central exchanges have struggled with issues like platform hacks,unfair trading practices and data breaches,which has bolstered the argument in favor of DEXs.

3. The Regulatory Advancements Many governments have made serious efforts to enhance the regulatory environment for crypto-currencies in an attempt to mitigate risk. The US Security and Exchange Commission has recently shown interest in the regulatory status of DEXs,but it has conceded that their decentralized structures make it hard to regulate. However,regulatory bodies around the globe will need to find appropriate processes and rulesets that can enable DEXs to operate compliantly while still preserving their core characteristics as decentralized networks.


Reference: cointelegraph.com