As part of Operation Chokepoint, the SEC is now coming for Defi, attempting to cover Defi under the definition of "exchanges" and force them to register. This is something Coinbase among other Cefi claim is impossible for them which would surely be imposs

Operation Chokepoint is an attempt by regulators to shut down crypto though the suppression and potential even death of crypto exchanges. After all, with in excess of 25,000 tokens in existence there is no feasible way for them to regulate even token project one by one. Instead, it is much easier to target the platforms by which these tokens are traded.

As part of this the SEC is now coming for Defi exchanges after their regulatory crackdowns on typical Cefi exchanges that occurred several weeks ago with Coinbase, Bittrex and Binance, as well as earlier with Gemini, Kraken, Genesis and others.

The SEC has reopened the comment period for the SEC's proposed amendments to Rule 3b-16 which defined what an “exchange”. The SEC specifically warned that it believes some trading platforms, including decentralized finance ("DeFi"), constitute an "exchange". They make the goal of their actions here very clear, in attempting to now come for Defi.

Defi exchanges being defined as “an exchange” will then mean that Defi exchange must register as a securities exchange. First of all, many crypto exchanges most notably Coinbase has repeatedly stated how difficult, if not outright impossible this is to do. Many many others simply claim that the SEC provides no regulatory advice and yet come after exchanges with no warning or guidance claiming they are breaking securities laws without providing any means of how to comply with said laws.

Further to this, even if normal Cefi exchanges could register it would be impossible for a Defi exchange to register as registration is structured in such a way for a centralized company with the typical corporate structure, financial setup, representatives, oversight, management and physical locations/headquarters. There is simply no way the decentralized, and in many ways anonymous and virtual setup of a Defi exchange to properly satisfy the necessary registration criteria.