- The U.S. Securities and Exchange Commission has recently scrapped several stringent crypto-related rules introduced during former Chair Gary Gensler’s tenure.
- This reflects a new tone within the SEC, under Paul Atkins, that embraces sensible rules and collaborative regulation.
Paul S. Atkins is leading the U.S. Securities and Exchange Commission (SEC), having stepped into the role on April 21 after being nominated by President Trump and confirmed by the Senate. He’s no stranger to the SEC. Atkins previously served as a commissioner from 2002 to 2008 under President George W. Bush.
Since returning, he’s made it clear that crypto regulation is a top priority. In January 2025, under Acting Chair Mark Uyeda, the SEC launched a dedicated crypto task force to address some of the industry’s regulatory concerns. Just recently, it announced the withdrawal of 14 previously proposed rules, many of them seen as controversial within the digital asset space.
This is the opposite of what we saw under Gary Gensler, who chaired the SEC from April 2021 to January 2025 during President Biden’s term. Gensler was known for his tough stance on crypto. He insisted that most digital assets should be treated as securities. And this led to high-profile lawsuits against industry giants like Ripple, Coinbase, and Binance. Now, with the SEC pulling back several crypto-focused rules, especially those aimed at custody services and decentralized exchanges.
What Was Repealed?
The SEC proposed changes to Exchange Act Rule 3b-16 that aimed to widen the definition of an “exchange ”in April 2023. The goal? To bring decentralized finance (DeFi) platforms under the same rules as traditional securities exchanges. But with that proposal now off the table, DeFi projects no longer face the immediate threat of being squeezed into a regulatory model that wasn’t built for them.
Another rule that ended up being dropped required investment advisors to store their clients’ crypto assets only with qualified custodians, along with enforcing stricter safety measures. But many in the industry felt this was overstepping, especially considering how fast crypto is growing and how traditional guardrails don’t always fit. Another proposal targeted firms dealing with crypto-related swaps, pushing them to report detailed position data.
This didn’t sit well with crypto funds, who argued the requirements were too heavy-handed and didn’t reflect the nature of their work. The SEC had also proposed tighter cybersecurity and risk management rules for investment advisors and funds, including those in crypto.
While aimed at improving transparency, many saw these requirements, like mandatory incident disclosures, as inflexible and misaligned with how the space actually operates.
Similarly, the proposed ESG reporting mandate would have required public companies to provide detailed disclosures on environmental, social, and governance metrics. Critics felt it placed unnecessary burdens on businesses, especially those in crypto.
Crypto custodians, including banks, are also breathing a sigh of relief. Earlier, we reported on a controversial rule known as SAB 121, which made it difficult for institutions to safely hold digital assets and was scrapped. This opens the door for more secure and accessible crypto custody services moving forward.
Now, with new leadership, the shift is already showing; several investigations, including those into Coinbase, Kraken, ConsenSys, Yuga Labs, and OpenSea, have been closed. With President Trump regaining influence and appointing more crypto-friendly figures, the U.S. regulatory climate is moving towards encouraging innovation rather than stifling it.
Credit: Source link
