In a landmark shift for U.S. crypto regulation, the Securities and Exchange Commission (SEC) has officially withdrawn 14 proposed rule changes, many of which were central to the Biden administration’s enforcement-heavy approach to digital assets. The move signals a sharp departure from prior policy and underscores the SEC’s evolving stance under the leadership of Chair Paul Atkins.
14 Crypto-Related Rules Rolled Back
On Thursday, the SEC released a notice confirming it was rescinding proposed rules introduced between March 2022 and November 2023, stating the Commission “does not intend to issue final rules” based on those proposals. If further regulatory action is taken in the future, the agency emphasized it would introduce entirely new proposals for public comment.
This sweeping rollback includes two of the most controversial proposals:
- Amendment to Rule 3b-16 under the Exchange Act, which aimed to expand the legal definition of an “exchange” to include communication systems and decentralized finance (DeFi) protocols.
- The Safeguarding Advisory Client Assets rule, proposed in March 2023, which sought to impose strict custody requirements on registered investment advisers holding crypto on behalf of clients.
Impact on DeFi and Custody Providers
The proposed 3b-16 amendment was heavily criticized for potentially categorizing many DeFi platforms as regulated exchanges, even if they did not act as intermediaries. Developers and legal experts warned this could have chilled innovation, driving projects overseas or into legal uncertainty.
Similarly, the custody rule raised alarm across the industry by proposing that only “qualified custodians” could safeguard crypto assets on behalf of advisers. Since most crypto-native custodians didn’t meet the traditional SEC definition, this would have forced many advisers to exit crypto markets or drastically alter their operational structures.
By withdrawing these proposals, the SEC has temporarily lifted a major cloud of regulatory pressure that had loomed over large swaths of the digital asset sector.
The Atkins Era: A New Direction for Crypto Oversight
The withdrawal reflects a broader shift under the Trump administration and SEC Chair Paul Atkins, a known advocate for limited regulation and free-market innovation. Since taking office in April 2025, Atkins has guided the SEC toward a more measured and collaborative approach to crypto oversight.
“We’re moving away from policy by enforcement and toward clear, innovation-forward rulemaking,” Atkins stated during a recent speech.
To lead this change, the SEC has formed a Digital Assets Task Force, tasked with reassessing the Commission’s approach to crypto policy and enforcement. Within weeks of its formation, the task force began closing several high-profile investigations, including cases involving:
- Coinbase
- Kraken
- ConsenSys
- Yuga Labs
- OpenSea
This signals a marked de-escalation from the agency’s prior stance, which had seen lawsuits and investigations dominate crypto headlines.
What’s Next?
While the SEC is taking a softer approach, it’s not abandoning oversight altogether. The agency is expected to reintroduce clearer, fit-for-purpose rules in the coming months that support innovation while ensuring investor protections.
For now, industry players are welcoming the regulatory reset. It gives DeFi protocols, crypto custodians, and investment advisers much-needed breathing room to continue operating without the looming threat of abrupt rule enforcement.
The SEC’s decision to roll back core crypto-focused proposals marks a turning point in the regulatory landscape. Under Chair Paul Atkins, the Commission is adopting a more transparent, innovation-friendly strategy a significant pivot from the aggressive tactics of the previous administration. For the crypto industry, this shift could pave the way for constructive engagement, clearer regulations, and renewed growth in the U.S. digital asset space.
