Circle Internet Financial has expressed concerns regarding the U.S. Securities and Exchange Commission's (SEC) proposal to redefine the term "exchange" to include decentralized finance (DeFi) platforms, arguing that such a move might have negative implications for the cryptoasset industry. Circle acknowledges the need for prudent regulation of DeFi but cautions against applying traditional financial regulations without fully understanding DeFi's unique characteristics, such as self-custody of assets and the disaggregation of financial services. It criticizes the SEC's proposal for lack of comprehensive economic analysis, noting that the SEC has not adequately considered the potential impact on small entities, nor provided estimates of trading volumes on crypto exchanges. Circle also suggests that the SEC should explicitly exclude independent software developers from being classified as part of an exchange, and clarify the rules around pairs trading, which is essential for DeFi operations. Circle advocates for a more collaborative regulatory approach, similar to the one the SEC took with Congress in the late 1990s in response to the internet's impact on financial markets.