SEC Commissioner Hester Peirce: Truly Decentralized DeFi Needs No Legal Exemption
SEC Commissioner Hester Peirce has emphasized that truly decentralized Decentralized Finance (DeFi) does not need legal exemption. She drew a sharp line around DeFi, stating that investors do not require an exemption to use permissionless smart contracts for peer-to-peer trading.
The SEC and Commodity Futures Trading Commission (CFTC) have taken separate actions examining the limits of intermediary control. However, the question remains as to how much control a software provider can retain before it begins to resemble a regulated intermediary.
Peirce's statement expresses her own position, but a binding definition from the US Securities and Exchange Commission would require Commission action. The SEC's tokenized-securities order and staff statement leave 'truly decentralized' undefined, focusing on custody, access, software parameters, fees, recommendations, routing, and execution.