The U.S. Securities and Exchange Commission (SEC) has formally withdrawn 14 proposed regulatory rules targeting the cryptocurrency sector. This significant move signals a policy shift towards a more innovation-friendly approach under Chair Paul Atkins, reducing immediate regulatory pressures on decentralized finance (DeFi) platforms and crypto custodians.
The rescinded proposals included a contentious rule that would have significantly expanded the definition of an ‘exchange’ to potentially encompass many DeFi platforms. Another withdrawn rule, Safeguarding Advisory Client Assets, would have mandated investment advisers to hold client crypto assets exclusively with SEC-designated ‘qualified custodians,’ a standard many established crypto-native custody providers did not meet.
Chair Atkins, known for advocating limited government intervention, has emphasized regulatory clarity over enforcement since assuming the role. During his tenure, the Commission has closed several high-profile investigations into major cryptocurrency firms without enforcement action.
Reflecting a commitment to reassess cryptocurrency oversight, the SEC established an internal Digital Assets Task Force. This task force is focused on developing clearer policies for the rapidly evolving sector.
Market participants view the rule withdrawals as likely to diminish near-term regulatory uncertainty, potentially encouraging greater institutional engagement. However, the SEC may revisit regulatory approaches in these key areas with new proposals in the future.