The U.S. Securities and Exchange Commission (SEC) has repealed major regulatory provisions impacting the digital asset industry, specifically rescinding an expanded custody rule for crypto assets and Rule 3b-16, which classified certain DeFi platforms as securities exchanges. This rollback is expected to significantly alleviate regulatory constraints on institutions and decentralized finance protocols.
The deletion of the expanded crypto custody requirements aims to lower obstacles preventing traditional banks and institutional investors from offering digital asset custody services. This move is anticipated to foster innovation and encourage greater institutional participation within the cryptocurrency sector.
Simultaneously, the removal of Rule 3b-16 substantially reduces regulatory obligations for DeFi platforms. This adjustment provides clearer operation guidelines for Decentralized Exchanges (DEXs) and could stimulate the growth of more compliant DeFi ecosystems without the previous classification burdens.
Market analysts predict this regulatory shift will unlock new capital inflows into the digital asset space and enhance overall market liquidity. These expectations emerged as Bitcoin was recorded trading near $104,405 following the SEC announcement.
The SEC’s decision addresses persistent legal uncertainties surrounding crypto custody and DeFi exchange classification. While streamlining regulations for industry participants, the Commission asserts that core investor protections remain actively enforced, promoting safer and more scalable solutions for digital asset management.