13.06.2025 09:41
The U.S. Securities and Exchange Commission (SEC) has significantly altered its approach to regulating cryptocurrencies, reversing key policies enacted during the Biden administration. This dramatic shift involves the withdrawal of fourteen proposed rules, submitted between March 2022 and November 2023, all aimed at expanding regulatory control over digital assets, including decentralized finance (DeFi) and crypto custody.
In a formal announcement, the SEC clarified its intention to withdraw these proposed rules, explicitly stating it will not finalize them. This decision effectively halts the implementation of several significant regulatory measures. However, the SEC left open the possibility of future regulatory action in these areas, promising to issue new proposed rules if deemed necessary.
One of the rescinded proposals was a significant amendment to Rule 3b-16 under the Exchange Act. This amendment, initially proposed in March 2022, sought to redefine "exchange" under federal securities laws, potentially subjecting many decentralized finance platforms to regulation as securities exchanges, even without direct intermediaries facilitating trades. This broad interpretation sparked widespread concern that it could stifle innovation within the DeFi ecosystem.
Further illustrating the significant change in regulatory approach, the proposed Safeguarding Advisory Client Assets rule, introduced in March 2023, has also been scrapped. This rule aimed to tighten custody requirements for registered investment advisers, mandating the use of "qualified custodians" for all client assets, including crypto holdings. The stringent definition of "qualified custodian," however, excluded most existing crypto-native custody providers, threatening to significantly limit options for investment advisors and potentially forcing their withdrawal from the digital asset markets.
This reversal marks a broader strategic realignment within the SEC. Under the current administration, the commission has shifted away from an enforcement-heavy approach adopted previously, adopting a more "constructive" regulatory stance. This strategic change is largely attributed to SEC Chair Paul Atkins and reflects a notable departure from prior policy.
