Recent leadership changes at the SEC have led to the withdrawal of several proposed rules concerning decentralized finance and crypto asset custody.
Overview of Withdrawn Rules
The U.S. Securities and Exchange Commission (SEC) has withdrawn proposals that aimed to broaden the definition of "exchange" under Rule 3b-16 to include many DeFi protocols. These rules, which would have required investment advisers to use only qualified custodians for crypto assets, were criticized by industry experts.
SEC’s New Strategy
Under the new leadership of Chair Paul Atkins, the SEC has adopted a more collaborative approach, recognizing individuals' rights to control their digital assets. Under his direction, the SEC has hinted at a willingness to tailor oversight to the unique features of blockchain protocols and global market practices.
Impact on the Industry
The withdrawal of these rules creates space for the development of DeFi protocols and custody solutions without the threat of broad, one-size-fits-all regulations. Future proposals are expected to emerge only after extensive public consultation and targeted impact studies.
Changes at the SEC may lead to more technical regulation and proportionate oversight, opening new opportunities for growth in the decentralized finance sector.
