- SEC formally withdraws DeFi exchange proposed under Gary Gensler
- Controversial crypto custody rule officially removed by SEC
- New SEC leadership adopts a friendlier stance on digital assets
The U.S Securities and Exchange Commission(SEC) has officially dropped several rules that were proposed under former Chair Gary Gensler. These proposals include definitions of exchanges and strict custody rules on crypto-related activities. The move comes after wider regulatory changes under new leadership and industry discussions.
SEC Rescinds DeFi and Custody Rule Proposals
The agency withdrew amendments to Exchange Act Rule 3b-16, which proposed inclusion of decentralized finance platforms under national securities exchange rules. Blockchain policy experts and market participants criticized the proposal which was published in April 2023. The SEC’s new position represents a change in its approach to new digital asset technologies.
Also, the SEC withdrew a proposed custody rule amendment that would have affected crypto asset investment advisers. The regulation would have forced the custodians to comply with new standards, which raised concerns in financial institutions. Opponents warned that the rule could diminish crypto custody services in a constrained banking environment.
The SEC also dropped other proposals such as cybersecurity risk management and ESG compliance requirements to investment advisers and funds. These rules proposed in Gensler’s tenure, were criticized as an overreach and unclear in practical implementation. Their removal matches the agency’s shift in pro-crypto policies.
Gensler, the former SEC Chair, led the agency between 2021 and January 2025 and utilized crypto enforcement as a regulatory method . This approach led to lack of legal clarity in decentralized platforms and digital asset custodians.
Regulatory Shift Under New SEC Leadership
The commission led by Chair Paul Atkins, has re-evaluated its crypto approach since January 2025. His administration stresses on clear instructions and consultation rather than enforcement-based policy. Moreover, Atkins voiced support for users to maintain custody their of digital assets.
In March 2025, acting Chair Mark Uyeda, asked SEC staff to reconsider the proposed custody rule amid growing opposition. The action indicated the increased readiness of the agency to reexamine aggressive approach from the previous administration. The formal withdrawal on Thursday completes that correction of course.
The recent policies are part of a shift in the U.S crypto environment since the election of President Donald Trump. Trump’s administration has advanced a more positive approach to blockchain and digital finance. Regulatory bodies have also adjusted their strategies in order to promote responsible adoption.
SEC Delays Review and Verdict on Various ETF Proposals
SEC also has pushed review dates on several crypto ETF applications, such as Dogecoin and Hedera products. On June 11, it initiated the review for the Bitwise Dogecoin ETF and requested public feedback. On June 12, it extended the review for Grayscale’s Hedera Trust.
On June 10, SEC also announced a delay in Canary Capital’s HBAR ETF application, to enhance regulatory scrutiny. The ETF applications are still in formal review with no particular date of approval.