❌ Two steps back, one forward.
The U.S. Securities and Exchange Commission (SEC) has officially withdrawn the proposed rules concerning the DeFi sector and the custody of crypto assets, previously led by former chair Gary Gensler. This was reported by The Block.
Among other things, the proposed amendments to Rule 3b-16 of the Exchange Act, presented in April 2023, were rejected. It aimed to expand the definition of 'exchange' to extend 'traditional' regulation to decentralized platforms. The initiative faced criticism from industry representatives.
"The only way to develop a viable approach to regulating DeFi is to withdraw the proposed amendments and start from scratch: with a notice of rulemaking that clearly outlines the regulatory position after a genuine dialogue with the industry," experts from Paradigm stated at that time.
Gensler led the SEC from 2021 until early 2025. His policy of 'regulation through enforcement' often drew widespread criticism and created uncertainty for the crypto industry.
