🇺🇸 SEC WITHDRAWS MULTIPLE PROPOSALS ON CRYPTO REGULATION UNDER GENSLER

The U.S. Securities and Exchange Commission (SEC) has officially announced the withdrawal of several regulatory proposals related to the crypto sector that were made under former Chairman Gary Gensler.

– One of the controversial proposals was to expand the definition of "exchange" to apply to DeFi platforms, which many industry stakeholders opposed due to concerns that it would stifle the development of DeFi.

– Experts from Paradigm argue that the only way for the SEC to build a reasonable legal framework for DeFi is to start over and have serious consultations with the community.

– The SEC also withdrew the proposal that required financial advisors to store crypto at licensed custodial organizations. Under this proposal, if you are an investment advisor managing digital assets for clients, you would be required to use the services of a bank or financial institution recognized by the SEC as a “qualified custodian.”

This sounds reasonable, but in reality, it leaves advisors and small firms with almost no choice but to rely on a few large banks, which have been cautious or even completely avoiding the crypto sector. This not only reduces competition in the industry but also creates additional barriers for startups and small to medium asset management companies looking to enter the market.