The U.S. Securities and Exchange Commission (SEC) has withdrawn several rules proposed during the chairmanship of former Chairman Gary Gensler, including Rule 3b-16.
Withdrawal of Rules and Their Content
According to Coinbase's Chief Legal Officer Paul Grewal, the SEC has rescinded Rule 3b-16, which aimed to expand the definition of "exchange" to include DeFi protocols. This rule sought to redefine exchanges to include systems that use non-firm trading interests to connect buyers and sellers of securities.
Crypto Community Reaction
The proposed rule faced pushback from the crypto community, which called for its withdrawal due to its potential adverse impact on crypto innovation. Former acting SEC Chair Mark Uyeda noted that he advised the SEC staff to abandon part of the rule, as it was designed to address alternative trading systems for the treasury markets.
SEC Regulatory Shift
The recent decisions by the SEC under new Chair Paul Atkins indicate a move toward a more flexible regulatory approach. Other federal agencies, including the Federal Reserve and Office of the Comptroller of the Currency, have also made similar changes. This shift has been widely supported by market participants and Congress as efforts for clear regulations in the crypto industry continue.
The withdrawal of anti-crypto rules by the SEC highlights an ongoing transformation in regulatory approaches to the crypto industry, aiming to create clearer and more favorable conditions for the development of cryptocurrency technologies.
