SEC Drops Key Crypto Regulations Proposed Under Biden

The U.S. Securities and Exchange Commission (SEC) has withdrawn more than 12 proposed regulations initiated during the Biden administration, including two major rules targeting the crypto industry. Among them were changes to Rule 3b-16, which would have expanded the definition of "exchange" to include DeFi protocols, and a rule concerning the custody of crypto assets.

On Thursday, the SEC announced the withdrawal of proposals submitted between March 2022 and November 2023, during the leadership of former Chairman Gary Gensler. The agency noted that it does not intend to finalize these proposals and that future regulations will be issued only if there is a change in stance.

This move is part of the Trump administration’s strategy to reduce regulatory pressure on both traditional financial markets and crypto.

The withdrawn items also include the proposed custody rule, which would have required all client assets to be held by qualified custodians. In addition, rules concerning cyber risk management and ESG disclosures were also repealed.