The U.S. Securities and Exchange Commission (SEC) has rescinded a number of rules proposed during the Biden administration, including those related to crypto custody and exchanges.
Withdrawal of Exchange Definition Rule
The SEC has withdrawn Rule 3b-16, which aimed to expand the definition of 'exchange' to include decentralized finance protocols and tighten crypto custody standards for investment advisers. This definition could have caused many DeFi protocols to be classified as securities exchanges.
Rescinding Custody Rules
The SEC also killed a proposed Safeguarding Advisory Client Assets rule that aimed to increase custody requirements for crypto. The proposed changes would have required investment firms to hold all client assets, including cryptocurrency, with a qualified custodian.
Other Withdrawn Regulations
Additionally, the SEC withdrew cybersecurity risk management and reporting rules for investment advisers, and a proposal for public companies to comply with enhanced ESG reporting requirements. These changes affect both traditional and crypto markets.
The withdrawal of these SEC rules highlights the current direction of regulatory policy and potential changes in the regulation of cryptocurrency and financial markets.
