Nikolas Sargeant
The U.S. Securities and Exchange Commission (SEC) has rescinded over a dozen proposed rules introduced during the Biden administration, including key regulations targeting cryptocurrency custody and decentralized finance (DeFi) platforms. Among the withdrawn rules is Rule 3b-16, which sought to expand the definition of "exchange" to encompass DeFi protocols, potentially subjecting them to stringent SEC oversight. Additionally, the proposed Safeguarding Advisory Client Assets rule, intended to impose stricter custody requirements for investment advisers handling digital assets, has been withdrawn.
These regulatory rollbacks align with President Donald Trump's deregulatory agenda and reflect a significant shift in the SEC's approach to cryptocurrency oversight. Under the leadership of Acting Chair Mark Uyeda and Commissioner Hester Peirce, the SEC is moving towards a more industry-friendly stance, focusing on creating a clear and rational regulatory framework for digital assets. Additionally, they have dropped a major lawsuit against Binance.
The decision to withdraw these rules has been met with mixed reactions. Supporters argue that the previous regulations were overly broad and could have stifled innovation in the crypto sector. Critics, however, express concern that the rollback may lead to insufficient investor protections and increased market volatility.
As the SEC continues to reassess its regulatory approach, the crypto industry is closely monitoring developments, anticipating new guidelines that balance innovation with investor safeguards. The outcome of this regulatory shift will likely influence the future landscape of digital asset markets in the United States.
