It is what it reads. I wanted to add the link here for people to read it from the SEC website itself, instead of repeating FUD. This type of announcement is not new, they have been sent out since 2014.
And yes, maybe it is a good thing to have the exchanges go through regulations, so the exchanges don't screw us. In any case this announcement shows that Crypto is a serious technology that is here to stay. In my eyes this is good for the long term health of crypto.
I'm sure that going through the paperwork to get the SEC approval is a pain in the neck. But why do we care? That's a problem for the exchange owners. Whom by the way, have millions of dollars in income (thanks to us), that can use it to hire a legal team and go through the bureaucracy and fees involved with being regulated under SEC.