Polygon Labs has pointed out that the new rule would be logistically unworkable, given the structure of blockchain technology. They highlight that the numerous independent validators of blockchain transactions cannot practically coordinate to register as an exchange, and these validators, by design, don’t control DeFi protocols.
The SEC is out of control. They made it clear that they consider securities basically any crypto asset except Bitcoin and want to apply a legislation from the 30’s to all of it. Not to mention the enforce-first mindset.