The U.S. Securities and Exchange Commission (SEC) has announced the withdrawal of several proposed rules initiated during the Biden administration, including significant regulations targeting cryptocurrency custody and decentralized finance (DeFi). This move signals a shift in regulatory approach, aligning with promises of deregulation in both traditional and digital asset markets.
SEC Rolls Back Crypto Regulations
The SEC's decision, announced on Thursday, June 13, 2025, involves rescinding 14 notices of proposed rulemaking issued between March 2022 and November 2023 under former Chair Gary Gensler. The agency stated it "does not intend to issue final rules with respect to these proposals," indicating a departure from previous regulatory intentions.
Key Takeaways
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Expanded "Exchange" Definition (Rule 3b-16) Nullified: This rule would have broadened the definition of an "exchange" to potentially include DeFi protocols, subjecting them to stricter oversight. Its withdrawal means many DeFi platforms will not be categorized as securities exchanges under this specific amendment.
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Crypto Custody Rule Rescinded: A proposed rule from March 2023, aimed at increasing custody requirements for crypto assets under the Investment Advisers Act of 1940, has been withdrawn. This rule would have mandated investment firms to hold client crypto assets with "qualified custodians," a definition most crypto exchanges and wallet providers did not meet.
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Other Regulatory Withdrawals: The SEC also withdrew proposals concerning cybersecurity risk management for investment advisers and funds, position reporting for large security-based swaps, and enhanced ESG reporting requirements for public companies.
Impact on the Crypto Market
This regulatory rollback is seen as a significant development for the cryptocurrency industry. Paul Grewal, Chief Legal Officer at Coinbase, noted the withdrawal of "3b16, qualified custodian, and all the other unfinished Gensler rule proposals." The move is consistent with President Donald Trump's broader agenda of deregulation, which has been anticipated to impact both traditional and digital markets.
Future Regulatory Landscape
While the SEC has withdrawn these specific proposals, it has indicated that new rules could be proposed in the future should its stance change. For now, the rescission provides a clearer, less restrictive regulatory environment for crypto firms and investors, potentially fostering innovation and growth within the digital asset space without the immediate burden of these previously proposed regulations.
Sources
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SEC Kills Proposed Crypto Custody And DeFi Rules, Cointelegraph.
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