U.S. SEC "Centralized sequencer Layer 2 should be classified as an exchange"

The U.S. Securities and Exchange Commission (SEC) said it could apply the same registration requirements as exchanges to Layer 2 blockchains that operate centralized sequencers.

On the 9th (Korean time), according to crypto-focused media CryptoSlate, SEC Commissioner Hester Peirce said in an interview that "unlike decentralized protocols, a centralized sequencer format where one party controls the matching engine is in fact similar to an exchange."

A sequencer determines the order of transactions that occur on Layer 2 networks such as rollups, collects them, and posts them back to Layer 1.

Some Layer 2 projects centralize transaction ordering to address the Maximum Extractable Value (MEV) problem.

Commissioner Peirce said, "Smart contracts cannot be subject to regulation simply because 'code runs'," and added, "projects that adopt a centralized operational structure should be classified as subject to regulation under existing law."