SEC Reconsiders Cryptocurrency Regulation

The U.S. Securities and Exchange Commission (SEC) is reconsidering a regulatory proposal aimed at expanding its oversight of cryptocurrency trading platforms.

Acting Chairman Mark Uyeda announced his intention to scale back the initiative, which would require certain digital asset businesses to register with the SEC.

The proposal, under development for years and awaiting finalization, sought to redefine trading venues under the SEC’s jurisdiction. However, Uyeda instructed SEC staff to halt progress on that aspect of the rulemaking.

> “It was a mistake, in my view, for the commission to conflate regulation of Treasury markets with a heavy-handed attempt to suppress the crypto market,” Uyeda stated in a speech prepared for the International Bankers Institute in Washington. He noted overwhelming public opposition to the SEC’s proposed expansion of the definition of an exchange as a key reason for this reconsideration.

The rule aimed to redefine certain “communications protocols” as exchanges, a move Uyeda argued was poorly specified and could inadvertently cover various crypto-related technologies. “The proposal would cover a variety of protocols used in relation to crypto assets,” he explained.

This initial proposal was part of several regulatory efforts led by former SEC Chairman Gary Gensler, whose cryptocurrency regulation approach has faced criticism. The shift in policy comes as the SEC experiences leadership changes following recent appointments by President Donald Trump.

*This is not investment advice.