**SEC Eyes Changes to Exchange Definitions Amid Crypto Concerns**

The SEC, led by Chairman Gary Gensler, is pushing for changes to the definitions of "exchange" and alternative trading systems. Speaking at the US Treasury Market Conference on Sept. 26, Gensler highlighted the need for these updates to enhance the efficiency of the US Treasury bond market.

- **Dealer Definition Update**: In February, the SEC adopted a new definition of "dealer" to include more market players like principal-trading firms using algorithmic strategies. This move faced criticism from pro-crypto politicians for its impact on digital asset trading.

- **Exchange and DeFi**: A 2022 proposal to redefine "exchange" and alternative trading systems is under scrutiny. The proposal, which includes decentralized finance (DeFi) platforms, aims to tighten registration requirements and close regulatory gaps. The changes are not yet finalized.

- **Crypto Regulation**: Gensler did not mention cryptocurrency or DeFi in his speech but later told CNBC that the crypto industry is adequately regulated by existing laws.

Prometheum and tZero are currently the only firms with special purpose broker-dealer status for digital asset securities, allowing them to offer custody services for these assets.