The SEC just pulled the rug from under a whole bunch of crypto rules cooked up during the Biden years.
Over a dozen proposed regulations, including two big ones targeting DeFi protocols and crypto custody, have been tossed into the trash bin. Finally.
No thanks
The Securities and Exchange Commission announced on Thursday that it’s scrapping a bunch of rule proposals made between March 2022 and November 2023, all under former Chair Gary Gensler’s watch.
They’re not planning to finalize any of these rules anytime soon. If they change their minds down the road, sure, they’ll draft new ones. But for now? Nada.
This move fits snugly into the latest wave of deregulation championed by President Trump, who’s been on a mission to slash red tape in both crypto and traditional markets.
One of the biggest casualties is Rule 3b-16. This rule was set to broaden the definition of exchange to rope in DeFi platforms and tighten crypto custody rules for investment advisers. Imagine that, DeFi protocols suddenly labeled as securities exchanges.
That would’ve been really a game-changer, but not in a good way for many crypto players.
The SEC first floated this idea back in March 2022, but then acting Chair Mark Uyeda decided to pull the plug on it earlier this year.
Down goes 3b16, qualified custodian, and all the other unfinished Gensler rule proposals. @secgov just issued final notices rescinding them all.
— paulgrewal.eth (@iampaulgrewal) June 12, 2025
Chopping
And then there’s the crypto custody rule. This one was a doozy. Proposed in March 2023, it aimed to beef up custody requirements for cryptocurrencies, forcing investment firms to stash client crypto with qualified custodians, basically regulated banks or broker-dealers.
Problem is, most crypto exchanges and wallet providers don’t fit that bill. So, advisers might’ve had to ditch their current providers or just quit the crypto game altogether. Uyeda, sensing the pushback, asked his team to reconsider this rule, and boom, it’s gone.
The SEC also nixed rules on cybersecurity risk management for investment advisers and funds, which would’ve impacted crypto fund managers and custodians.
Plus, they scrapped a position reporting rule for large security-based swaps, relevant for those dealing with crypto derivatives.
And to top it off, the regulator walked back on plans to enforce tougher ESG reporting for public companies.
Stop the pain
What does this all mean for us, and for the market? For one, the crypto world just got a breather.
No more looming regulatory nightmares from these particular proposals. It’s like the office finally canceled that dreaded surprise audit, everyone breathes a sigh of relief, but you know the boss is still watching.
The SEC’s move signals a softer stance, at least for now, giving crypto firms some room to breathe and innovate without the heavy hand of these Biden-era rules.
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