The U.S. Securities and Exchange Commission withdrew various proposed rules under the former SEC Chair Gary Gensler. This marks a major win for the crypto industry, as many crypto executives and legislators criticized Gensler’s regulatory overreach for hindering crypto innovations.
According to the official announcement, the SEC has officially withdrawn 14 notices of proposed rulemaking issued between March 2022 and November 2023. These include Exchange Act Rule 3b-16, by Gensler to define DeFi platforms as exchanges, and the crypto custody rule, which forced investment under regulated custodians. The rules faced intense disapproval from industry executives when many crypto businesses were debanked.
Coinbase CLO Paul Grewal took to X on June 13 to praise the SEC’s decision to officially withdraw many proposed rules that imposed strict regulations, especially DeFi and crypto custody rules.
“Down goes 3b16, qualified custodian, and all the other unfinished Gensler rule proposals, said Grewal as the SEC issued final notices.
Bill Hughes, director of global regulatory matters of ConsenSys, also commented on the SEC’s rollback of Gensler-era rules, saying it “feels good.” Joe Lubin, founder of Consensys, earlier argued that digital assets differ from traditional securities and require new regulations.
Other crypto executives including Solana Labs co-founder Anatoly Yakovenko reacted, remarking victory for crypto innovation and easing crypto regulations in the United States.
As reported earlier, Acting SEC Mark T. Uyeda highlighted friction between the SEC under the Biden regime and the crypto industry over the issue of cryptocurrencies being treated as “securities.” He made his point to build new crypto rules and regulations to guide the whole crypto community instead of punishing them.
Since then, the SEC Crypto Task Force has worked towards bringing clarity to the crypto industry, with a framework and regulatory guidelines. The securities agency has also dropped enforcement actions, including lawsuits against Binance, Ripple and other crypto firms.
