The US SEC is reconsidering its approach to regulating cryptocurrency firms, signaling a potential retreat from earlier plans to impose stricter registration requirements.
Acting Chairman Mark Uyeda announced on Monday that he has directed SEC staff to explore options for scrapping a proposed rule. The rule would have expanded the definition of alternative trading systems (ATS) to include certain crypto firms.
The SEC introduced the proposal in 2022 to expand its oversight of cryptocurrency markets. The plan required some crypto platforms to register as alternative trading systems (ATS). This move aimed to align the crypto industry more closely with traditional financial markets.
ATS platforms facilitate securities trading outside of conventional stock exchanges, operating under a different set of rules. However, the move faced strong opposition from industry leaders, who argued it would stifle innovation and impose unnecessary regulatory burdens.
Uyeda Calls Crypto Oversight Expansion a ‘Mistake,’ Orders Reassessment
Speaking to a group of bankers, Uyeda acknowledged that the proposal was initially intended to regulate Treasury markets but had been broadened to include crypto in a way he now views as excessive.
“In my view, it was a mistake for the Commission to link together regulation of the Treasury markets with a heavy-handed attempt to tamp down the crypto market,” Uyeda stated.
To address concerns, he issued two directives to SEC staff. First, he asked them to re-engage with the Treasury Department, the Federal Reserve and key market players. Their goal is to reassess whether regulatory changes for Government Securities ATSs should proceed.
Second, he instructed staff to explore ways to abandon the controversial expansion of the ATS definition for crypto firms.
SEC Moves Away from Gensler-Era Crackdowns
The original rule proposal was one of several explored under former SEC Chairman Gary Gensler. His tenure was marked by aggressive enforcement actions against crypto firms.
However, the new Trump administration has taken a different stance, pushing for more industry-friendly policies. In line with this shift, Uyeda recently launched a crypto task force on Jan. 21 to develop a clearer legal framework for digital assets, establish practical registration pathways, and create reasonable disclosure requirements.
The SEC’s newly formed Crypto Task Force is set to hold its first meeting later this month, marking a significant step toward reshaping the regulatory landscape for digital assets.
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