The post SEC Scrutinizes Layer 2 Blockchains’ Exchange Practices appeared on BitcoinEthereumNews.com.

Key Points: SEC Commissioner highlights potential regulation of centralized Layer 2 blockchains. Impact on Ethereum and related tokens discussed. No official comments from Ethereum community leaders yet. On September 9th, SEC Commissioner Hester Peirce highlighted potential exchange registration for Layer 2 blockchains with centralized matching engines during an interview on “The Gwart Show.” This raises regulatory challenges for blockchain innovations, distinguishing decentralized protocols from centralized operations and impacting Ethereum-based Layer 2 platforms significantly affected by these discussions. SEC Challenges Centralization in Layer 2 Blockchain Networks The SEC’s Hester Peirce addressed the regulatory complexities faced by Layer 2 blockchains in an interview on “The Gwart Show.” She stated, centralized matching engines could be classified as exchanges, necessitating registration. Peirce differentiated between immutable decentralized networks and centralized transaction layers. Changes in approach involve potential regulatory mandates for Layer 2 entities, impacting Ethereum-based systems. Ethereum (ETH) and tokens of Layer 2 protocols such as Arbitrum may be affected due to their reliance on centralized matching. Peirce emphasized safeguarding decentralized protocols from such regulations. “If you have a matching engine that’s controlled by one entity … that looks a lot more like an exchange.” — Hester Peirce, Commissioner, U.S. SEC. Industry reactions remain prudent, with key influencers yet to publicly respond. However, developer communities express urgency to adjust sequencer designs to preempt regulatory challenges. The SEC’s stance underscores the increased importance of decentralizing blockchain infrastructure components. Ethereum Faces New Regulatory Challenges Amid SEC Scrutiny Did you know? In 2025, regulatory actions targeting centralized crypto platforms echoed Gensler-era strategies, emphasizing operational control concerns reminiscent of past enforcement efforts. Ethereum’s (ETH) current trading price is $4,356.34, with a market capitalization of $525.83 billion, according to CoinMarketCap. Over the last 24 hours, ETH’s trading volume has surged by 65.34%, despite a slight decrease over the past week.…

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Filed under: News - @ September 9, 2025 11:29 am