- Acting SEC chair Mark Uyeda indicates the agency may revise or withdraw Gary Gensler’s crypto custody proposal that would have required investment advisers to use qualified custodians.
- The SEC under the Trump administration has shifted toward a more collaborative approach with the cryptocurrency industry, reversing several Gensler-era policies.
- A new crypto task force led by Commissioner Hester Peirce is engaging with industry participants, with an inaugural roundtable scheduled this week.
The U.S. Securities and Exchange Commission is considering scrapping former Chairman Gary Gensler’s stringent crypto custody regulations that would have forced investment advisers to store client digital assets with qualified custodians like chartered banks.
Acting SEC Chair Mark Uyeda acknowledged on Monday that the proposal faces substantial resistance, telling attendees at a San Diego investment conference that proceeding with the original plan may face "significant challenges."
"Given such concern, there may be significant challenges to proceeding with the original proposal," Uyeda stated in his remarks at the event.
Uyeda has instructed SEC staff to collaborate with the agency’s cryptocurrency task force to explore alternatives, including the possibility of withdrawing the rule completely. This potential reversal represents one of several policy shifts following Gensler’s departure ahead of President Trump taking office.
The custody rule proposal, introduced approximately two years ago, sought to broaden federal custody requirements to encompass digital assets, mandating that investment advisers hold client assets exclusively with qualified custodians that meet specific regulatory standards.
Industry participants raised substantial concerns about the proposal’s broad scope during the public comment period, highlighting potential implementation problems and market disruptions that could result from the restrictive approach.
Under the new administration, the SEC has pivoted from Gensler’s aggressive enforcement strategy toward a more industry-friendly stance. This regulatory reset follows significant industry pushback, including a lawsuit filed by 18 states challenging Gensler’s regulatory approach before his exit.
The regulatory transformation includes reconsidering the expanded definition of "exchanges" and halting enforcement of certain rules specifically targeting cryptocurrency companies. Additionally, the SEC has revoked Staff Accounting Bulletin (SAB) 121, which had required firms holding crypto assets to record them as liabilities on their balance sheets.
In a demonstrative shift from previous policy, the agency has dismissed enforcement actions against major industry players including Binance, Kraken, and Coinbase, signaling regulatory relief for the sector after years of legal battles and regulatory uncertainty.
The Trump administration has established a dedicated crypto task force led by Commissioner Hester Peirce, nicknamed "Crypto Mom" for her supportive stance on digital asset innovation. The task force will work directly with industry participants to develop more suitable regulatory frameworks.
The group’s first roundtable discussion, titled "How We Got Here and How We Get Out – Defining Security Status," is scheduled for this Friday, marking the beginning of a new collaborative approach to cryptocurrency regulation.
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