Galaxy Digital Advocates for AMMs to Be Exempt from Exchange Regulations
- Galaxy Digital submitted a letter to the US SEC Crypto Task Force regarding automated market makers (AMMs) and tokenized securities.
- The firm argues that AMMs do not qualify as “exchanges” under the Securities Exchange Act of 1934 due to criteria like full transparency and non-discriminatory access.
- Liquidity providers on these AMMs are not considered “dealers,” as they trade solely for their own accounts without soliciting orders.
- Galaxy Digital urges the SEC to create a clear pathway for tokenized securities trading on AMMs through an innovation exemption framework.
- The proposed framework could include conditions such as whitelisting, volume caps, and required disclosures to ensure market integrity.
This initiative by Galaxy Digital aims to clarify the regulatory status of AMMs and facilitate compliant trading of tokenized securities in the evolving crypto landscape. The firm’s stance highlights the need for regulatory clarity amidst differing opinions from industry groups.
With its push for innovation exemptions, Galaxy Digital seeks to enhance opportunities for tokenized securities trading while maintaining compliance with existing regulations. (Source)
