The US Securities and Exchange Commission (SEC) has recently made a significant decision to roll back 14 proposed rules, marking a shift in regulatory priorities away from the aggressive stance taken by the previous administration. This move, announced on June 12, includes the withdrawal of key measures that were once aimed at the crypto industry.
The withdrawn proposals, introduced between March 2022 and November 2023 under former SEC Chair Gary Gensler, had faced strong opposition from crypto advocates. Two of the rescinded rules specifically targeted the management and trading of digital assets in the US.
One of the rules that was rescinded sought to broaden the definition of securities exchanges to encompass decentralized finance (DeFi) platforms. This proposal would have brought a wide range of blockchain-based systems under the SEC’s jurisdiction by classifying them as exchanges. Another rescinded rule focused on crypto custody practices, requiring investment advisers to store all client assets, including digital assets, with qualified custodians.
Critics of these rules argued that they would have placed unnecessary restrictions on the sector, potentially stifling innovation and driving activity offshore. Eleano Terret, a former Fox Business journalist, expressed concerns about the implications of the Custody Rule on certain state-chartered entities’ ability to act as qualified custodians.
The SEC’s decision to abandon these proposals is part of a broader effort to provide clarity on crypto regulation and aligns with President Donald Trump’s deregulatory agenda to reduce compliance burdens in both traditional and digital markets. In recent months, the SEC has dropped several lawsuits against crypto companies, signaling a departure from its previous regulation-by-enforcement approach.
The new Chair of the SEC, Paul Atkins, has been actively working to introduce pro-crypto regulations that are expected to promote responsible innovation in the sector. These efforts are aimed at fostering a more favorable environment for the growth and development of the crypto industry.
Overall, the SEC’s decision to rescind these rules reflects a more balanced approach to regulating the crypto space, taking into account the need for innovation while ensuring investor protection and market integrity. This shift in regulatory stance is expected to have a positive impact on the industry and create opportunities for continued growth and development.