SEC Changes Course: A Boost for DeFi and Crypto Custody

During the Trump presidency, America was in control. The Securities and Exchange Commission (SEC) has officially revoked several controversial rule proposals that aim at decentralized finance platforms and crypto custodians. These regulations, which were first enacted during the Biden administration led by Gary Gensler, were heavily condemned by industry members for their potential to restrict innovation and limit access to crypto services. Removable proposals included the DeFi Exchange Rule (Rule 3b-16), which had the potential to compel decentralized platforms to register as exchanges, and the Crypto Cusentody Rule, which would have required investment advisers to use qualified custodians for client crypto assets.

As part of a wider crypto regulation agenda under President Trump, these rules have been removed, marking an end to the more inflexible regulatory measures implemented by other parties during his administration. These proposals are not likely to be revisited by the SEC until its regulatory stance changes. The decision to re-examine the rules in response to industry criticism was made by acting SEC Chair Mark Uyeda in March 2025. This move follows his previous one.

This move has garnered widespread approval from many in the crypto industry, who see it as a positive development and signal for an increasingly open regulatory framework in America. Why? Additionally, SEC Chairman Paul Atkins has declared his intention to investigate "innovation exemptions" for DeFi platforms, stressing the significance of self-custody and advocating for transparent and collaborative rulemaking processes over enforcement-based methods. These new regulations are a significant shift in the U.S. crypto regulatory landscape, and could have implications for Ripple's ongoing legal battle and the future of crypto in that country as well.".