The U.S. Securities and Exchange Commission (SEC) may revise or abandon former chair Gary Gensler’s controversial proposal that would tighten crypto custody standards for investment advisers.
Under Gensler’s two-year-old proposal, the SEC sought to expand federal custody rules to include assets like crypto, requiring investment advisers to hold client assets with qualified custodians, such as federal- or state-chartered banks.
In his remarks at an investment conference in San Diego on Monday, acting SEC chair Mark Uyeda acknowledged “significant concerns” raised by industry commenters over the “broad scope” of Gensler’s proposal.
“Given such concern, there may be significant challenges to proceeding with the original proposal,” Uyeda said.
The regulator mentioned he had directed the SEC staff to work with the agency’s crypto task force to explore alternatives, including withdrawing the rule altogether.
SEC Rethinks Whether to Expand 'Exchange' Definition to Include Crypto: Acting Chair
The Securities and Exchange Commission will assess how a regulatory proposal expanding the definition of an exchange can be modified to exclude entities that facilitate crypto transactions, Acting SEC Chair Mark Uyeda said on Monday. When the agency first moved in 2020 to establish clearer rules for alternative trading systems, the guidance was intended to mainly impact U.S. Treasury market participants, Uyeda said at an event in Washington, D.C., hosted by the Institute of International Bankers...
The former SEC chair’s leadership was defined by stringent crypto oversight, but his resignation before Trump took office marked a pivot in the SEC’s regulatory direction.
The SEC’s stance on crypto has shifted considerably under President Donald Trump’s leadership, with a more lenient and collaborative approach replacing the hostile regulatory posture of the Biden administration.
With Uyeda now at the helm, the SEC is reconsidering several major policies from Gensler’s era, including contentious crypto regulations, which led to a lawsuit by 18 states before his departure.
The changes include rethinking the expanded definition of "exchanges" and halting the enforcement of certain rules that targeted crypto firms.
The SEC under Trump also revoked the s Staff Accounting Bulletin (SAB) 121 rule that required firms holding crypto assets to record them as liabilities on their balance sheets.
Trump's SEC Is Ending Crypto Lawsuits and Investigations—These Are the Biggest
The momentum has shifted in the yearslong battle between top crypto companies and protocols and the U.S. Securities and Exchange Commission under the new Trump administration. The regulator, which now has a crypto task force led by longtime industry advocate Hester Peirce, is moving away from what Pierce and others have called “regulation by enforcement” to less hostile engagements with crypto. Thus far, those words have rung true with the SEC recently backing away from fights with multiple to...
The regulator has since dropped enforcement actions against major crypto firms, including Binance, Kraken, and Coinbase, among others, signaling a major relief from the taxing legal battles and uncertainty that plagued the industry for the past few years.
In line with the Trump administration’s approach to crypto regulation, a significant crypto initiative was the formation of a dedicated crypto task force led by Commissioner ‘Crypto Mom' Hester Peirce.
The task force is tasked with working closely with the crypto industry, with its inaugural roundtable, “How We Got Here and How We Get Out – Defining Security Status,” scheduled to be held this Friday.
Edited by Sebastian Sinclair
