The U.S. Securities and Exchange Commission has formally withdrawn two major regulatory proposals affecting decentralized finance (DeFi) platforms and digital asset custodians, signaling a decisive pivot toward crypto-friendly policies.
Regulators retracted a contentious proposal to expand the definition of an exchange under Rule 3b-16, which would have imposed traditional securities exchange requirements on DeFi protocols. Simultaneously, the SEC abandoned a plan mandating investment advisors to custody cryptocurrencies exclusively with qualified custodians—a rule that had sparked widespread concerns about market liquidity and accessibility limitations.
Industry leaders celebrated the withdrawals as a victory for balanced regulation. Multiple executives emphasized the necessity for collaborative frameworks that safeguard investors while fostering technological progress. Current SEC Chair Paul Atkins reinforced the stance, endorsing principles of self-custody as an ‘American value’ applicable to digital assets.
This regulatory reversal aligns with broader political shifts under President Donald Trump’s administration, which has prioritized innovation-friendly policies across blockchain and digital asset sectors.