The SEC has removed a series of rules proposed by the agency under the Biden administration, including two related to cryptocurrency custody and exchanges.
SEC explain On Thursday, under former chairman Gary Gensler’s leadership from March 2022 to November 2023, “the notice of certain proposed rulemaking was withdrawn.”
The agency added that it “does not intend to issue final rules on these recommendations” and would propose new rules if it changes its stance on future regulatory actions.
This is the latest regulatory rollback from President Donald Trump, which has promised deregulation on crypto and traditional markets.
“Down 3B16, qualified trustees and all other unfinished Gensler domination recommendations,” said Paul Grewal, Chief Legal Officer, Coinbase Posted to X.
The exchange definition rule is invalid
Of the 14 rules withdrawn by the SEC Once was Rule 3B-16, which will expand the definition of “exchange” to include decentralized financial agreements and tighten the cryptocurrency custody standards for investment advisors.
The amendment defines certain terms used in the definition of “exchange”, which includes “a system that provides non-company trading interests and communication protocols to convene buyers and sellers who purchase securities.”
Extensive statements could have seen many decentralized financial (DEFI) protocols classified as stock exchanges.
The SEC has issued the first amendment to Rule 3B-16 of Exchange Act Rule in March 2022.
Mark Uyeda, the SEC chair that acted at the time Proposed abandonment Rules change to expand the definition of “alternative trading system” to include crypto companies in March.
Crypto-guardianship rules cancel
The same is true for SEC Being killed A rule proposed in March 2023 will increase cryptocurrency custody claims.
The SEC proposed rules for protecting consulting clients’ assets will expand existing guardianship rules under the Investment Advisory Act of 1940. It broadly constitutes all client assets applied for, but is particularly important for cryptocurrencies as it aims to bring digital assets more explicitly under the SEC. Guardianship requirements.
Investment companies will be required to hold all client assets, including cryptocurrencies, and have a “qualified custodian,” which usually means a regulated bank or broker dealer.
Most crypto exchanges and wallet providers do not meet the definition of “qualified custodian”, which may force advisors to change providers or exit spaces.
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March, Uyeda Ask his staff View the possible withdrawal of proposed crypto-guardianship rules.
🚨Latest: The SEC formally withdraws multiple regulatory recommendations, including expanded custody rules, Rule 3B-16, for DEFI exchanges and enhances ESG reporting requirements in the Gensler era. pic.twitter.com/v0jo3fkk8h
– Cointelegraph (@Cointelegraph) June 13, 2025
Other rules are revoked
Other rules that regulators withdraw include cybersecurity risk management and reporting rules for investment advisors and funds, which have had an impact on crypto fund managers and digital asset custodians.
Large security swap-based job reporting rules that may affect large entities Crypto derivatives The exposure was also withdrawn.
The regulator also revoked its recommendations to make public companies comply with enhanced ESG (Environmental, Social and Governance) reporting requirements.
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