The U.S. Securities and Exchange Commission has formally withdrawn multiple proposed cryptocurrency regulations, signaling a potential easing of compliance requirements for digital asset firms. The rescinded proposals included rules that would have significantly impacted decentralized finance platforms and institutional custody practices.
Among the withdrawn measures is Rule 3b-16, which aimed to expand the legal definition of ‘exchange’ to include DeFi protocols. This would have subjected decentralized platforms to the same stringent registration and oversight requirements as traditional securities exchanges. The SEC also rescinded the proposed Safeguarding Advisory Client Assets rule, which sought to impose enhanced custody standards specifically for digital assets held by investment advisers.
The regulatory rollback further includes withdrawn proposals on cybersecurity risk management protocols and environmental, social, and governance (ESG) reporting mandates. Industry participants view these withdrawals as reducing compliance burdens for DeFi operators and crypto custodians, potentially encouraging greater institutional participation and innovation within the sector.
Market analysts interpret the SEC’s actions as a notable shift toward regulatory clarity, though the commission retains the option to introduce revised proposals in the future. The move reflects ongoing efforts to balance investor protection with the evolving operational realities of blockchain-based financial systems.