SEC Considers Abandoning Proposal for Crypto Firms Registration
Acting chairman Mark Uyeda announced on March 10 that the US Securities and Exchange Commission (SEC) is considering abandoning a proposal that would require certain crypto firms to register as alternative trading systems.
Evaluation of Proposal Abandonment
At the “2025 Annual Washington Conference of the Institute of International Bankers,” Uyeda told an audience of bankers that he had instructed SEC staff to evaluate ways to abandon this provision. However, the plan has yet to be finalized.
Background of the Proposal
- The proposal, introduced in 2022, aimed to expand oversight of the crypto sector by classifying some firms under the same regulatory framework as traditional trading platforms.
- Crypto industry opposed this move as it would broaden the definition of alternative trading systems (ATS) and include some digital asset platforms.
Reasons for Abandoning the Proposal
The expansion was initially part of a broader initiative to regulate Treasury markets, but Uyeda indicated that merging the regulation of government securities trading with increased oversight of crypto firms was a misstep.
“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.”
Public Reaction
- Notably, the proposal would consider not only centralized exchanges as ATS but also DeFi protocols.
- Bill Hughes, a lawyer at Consensys, expressed support for Uyeda’s decision to abandon the proposal tying DeFi platforms to ATS.
- The US House Committee on Financial Services also welcomed Uyeda’s decision.
New Approach by SEC
The SEC is shifting its stance under the new administration and is now more inclined to cooperate with other government agencies and interest in public feedback.
Interagency Cooperation
- Commissioner Hester Peirce confirmed cooperation with the Commodity Futures Trading Commission (CFTC) on crypto matters.
Importance of Public Feedback
- Peirce emphasized the importance of feedback from the crypto industry on regulation efforts.
- The SEC, through the Crypto Task Force led by Peirce, will conduct public roundtables to gather public feedback on various aspects of the crypto industry.
Engagement with Crypto Firms
- The Crypto Task Force has been meeting with crypto firms to discuss different aspects, such as allowing staking on exchange-traded products (ETP).
