In a post on X, Coinbase’s Chief Legal Officer, Paul Grewal, has indicated that the company has submitted an objection to the U.S. Securities and Exchange Commission’s (SEC) proposal for expanding the definition of ‘exchange’. Grewal argues that the SEC’s proposal lacks crucial analysis, is based on unrealistic assumptions, fails to demonstrate the existence of the regulatory issue it aims to address, and significantly overestimates the benefits of the proposal. Key concerns include: lack of economic analysis, potential impacts on decentralized exchanges (DEXs), and doubts about the existence of the assumed problem. Coinbase asserts that the SEC should not extend this proposal to DEXs, as this could have significant implications for millions of Americans using digital assets and potentially harm the innovation in the growing DEX market. Moreover, the SEC starts from the assumption that there is a need for correction in the industry, but fails to substantiate the existence of such a problem. Coinbase believes that this is not the right approach to setting rules and suggests that the proposal should at least be withdrawn and corrected. Despite this, Coinbase expresses gratitude for the SEC’s serious consideration of its views and looks forward to further discussion on this important topic.