SEC Signals Major Crypto Policy Shift as Uyeda Moves to Scrap Exchange Rule

The U.S. Securities and Exchange Commission (SEC) is considering walking back a controversial proposal that would have forced certain crypto firms to register as exchanges.

Acting SEC Chairman Mark Uyeda signaled this shift during a speech on March 10 at the Washington Conference of the Institute of International Bankers, where he revealed that he had directed SEC staff to explore options for abandoning the rule.

Uyeda’s remarks come amid widespread criticism from industry participants, who argued that the rule would impose unnecessary regulatory burdens on crypto businesses.

“In light of the significant negative public comment received on the definition of exchange with respect to crypto, I have asked SEC staff for options on abandoning that part of the proposal,” he stated.

Regulatory Rollback Could Benefit Crypto Firms

Uyeda further noted that the proposal had improperly linked Treasury market regulation with an aggressive attempt to rein in the crypto sector, calling it a mistake. The origins of the proposal trace back to 2020 under former SEC Chairman Jay Clayton, who sought clearer oversight of alternative trading systems (ATSs), particularly in the U.S. Treasury market.

However, when the responsibility of finalizing the rule fell to Gary Gensler, who led the SEC from 2021 until his resignation in January 2025, it took a broader turn. Gensler expanded the definition of “exchange” to include various crypto trading platforms and communications protocols, significantly tightening regulatory oversight.

During his tenure, Gensler pursued an aggressive enforcement agenda, initiating over 100 regulatory actions against crypto firms. During his election campaign in 2024, Trump pledged to remove Gensler if elected.

Crypto Task Force and Market Impact

Since Gensler’s departure, the SEC has noticeably softened its approach. Several lawsuits against major crypto firms, including Gemini, Kraken, and Cumberland DRW, have been dismissed in recent weeks.

Additionally, the regulator has formed a new crypto-focused task force led by Commissioner Hester Peirce, a longtime advocate for digital asset innovation.