The U.S. Securities and Exchange Commission (SEC) is reconsidering a regulatory proposal that aims to expand its oversight of cryptocurrency trading platforms.
Acting Chairman Mark Uyeda announced his intention to scale back the initiative, which requires certain digital asset businesses to register with the agency.
The proposal, which has been in development for years and awaiting finalization, sought to expand the definition of trading venues under the SEC’s jurisdiction. But Uyeda has 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 said in a speech prepared for the International Bankers Institute in Washington. He cited the overwhelming public opposition to the SEC’s proposed expansion of the definition of an exchange as a key reason for the reconsideration.
The rule would redefine certain “communications protocols” as exchanges; a move that Uyeda argued was poorly specified and could inadvertently catch a variety of crypto-related technologies. “The proposal would cover a variety of protocols used in relation to crypto assets,” he said.
The initial proposal was one of several regulatory efforts spearheaded by former SEC Chairman Gary Gensler, whose approach to cryptocurrency regulation has been the subject of criticism. The shift in policy direction comes as the SEC undergoes leadership changes following recent appointments by President Donald Trump.
*This is not investment advice.
