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SEC Rethinks Crypto Exchange Rules
The U.S. Securities and Exchange Commission (SEC) might scrap a proposal that would require Defi exchanges to register as exchanges.
Acting SEC Chairman Mark Uyeda spoke at a banking conference on March 10. He said he had asked SEC staff to find ways to drop parts of the rule.
Public feedback on the proposal was mostly negative. Uyeda said linking crypto regulations to Treasury market rules was a mistake.
How the Rule Came to Be
The original rule was created in 2020 when Jay Clayton led the SEC. It was supposed to provide clearer rules for alternative trading systems (ATSs).*
Under former SEC Chair Gary Gensler, the rule changed. In 2022, the SEC expanded it to cover more than just Treasury markets.
(ATS: Private trading platforms that match buyers and sellers but aren’t full exchanges.)
Crypto Firms Could Have Been Affected
The new version of the rule redefined what counts as an exchange. It included “communications protocols,” but never explained what that meant.
Uyeda said this broad definition would have pulled in many crypto platforms. Critics saw it as an attempt to crack down on crypto through vague rules.
Gensler’s Tough Stance on Crypto
While Gensler was in charge, the SEC aggressively pursued crypto companies. From 2021 to his resignation in January 2025, he launched over 100 enforcement actions.
Donald Trump, who started his second term as U.S. president on the day Gensler resigned, had promised to fire him. After Gensler left, the SEC’s approach changed.
A New, Friendlier SEC?
Since January, several SEC cases against crypto firms have been dismissed. This includes cases against Gemini, Kraken, and Cumberland DRW.
The SEC also created a crypto task force to build a clearer framework for digital assets. It is led by Commissioner Hester Peirce, who is known for her pro-crypto stance.
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