The U.S. Securities and Exchange Commission (SEC) announced a significant shift in its policy by withdrawing several proposed rules targeting crypto assets and decentralized exchanges.
Withdrawal of Proposed SEC Rules
On Thursday, the SEC confirmed that it is formally rescinding 14 proposed rules introduced between March 2022 and November 2023. Among the retracted rules was an amendment to Rule 3b-16 and rules on safeguarding client assets that sought to expand regulatory oversight of digital assets.
Impact on the Crypto Market
The withdrawal of these proposals, including the definition of what constitutes an 'exchange', raised concerns that many DeFi platforms could fall under strict regulatory requirements. Critics warned that the proposed language could hinder the operation of many decentralized finance platforms and create limited options for investment advisers.
Changes in SEC Regulatory Policy
This move reflects a broader reorientation of the SEC's policy. Under Chair Paul Atkins, who advocates limited government intervention, the SEC has shifted from enforcement-led strategies toward more constructive regulation, creating a Digital Assets Task Force to reassess its approach to crypto oversight.
The withdrawal of proposed rules could reshape the regulatory landscape of crypto assets in the U.S., allowing for greater freedom for innovation in the sector. Future regulation will depend on new proposals that the SEC may present.
