On 03/18/2025, the U.S. Securities and Exchange Commission (SEC) is considering abolishing strict cryptocurrency custody regulations from the Joe Biden administration, opening up hopes for an industry long hindered by legal barriers. Acting SEC Chair Mark Uyeda revealed this move at a conference in San Diego, marking a significant change in how the agency oversees the digital asset market. Could this be the start of a more crypto-friendly era in the U.S.?
Custody Regulations: Burdens from the Biden Era
In February 2023, under Chairman Gary Gensler, the SEC issued a regulation requiring investment advisors to store crypto at entities meeting strict standards – usually banks or large financial institutions. The goal was to protect customer assets from 'abuse, loss, or misuse,' according to Gensler. However, this regulation faced heavy criticism for its overly broad scope, causing banks to hesitate in cooperating with the crypto industry. The result: many investment firms struggled to comply, slowing market development.
Mark Uyeda, the interim head of the SEC, stated that the agency is considering withdrawing or amending this proposal. He emphasized the need for 'effective, cost-saving regulations that respect legal authority limits.' This marks a clear departure from Gensler's hardline approach, who viewed crypto as a 'wild west' that needed strict control.
SEC Shift: Cancel or Relax?
Speaking in San Diego, Uyeda outlined a plan to reform how the SEC oversees Wall Street. In addition to canceling crypto custody regulations, the SEC is also considering easing regulations starting in August 2024, requiring mutual funds and other entities to report their portfolios monthly instead of quarterly. This regulation was previously defended by Gensler for increasing transparency, but faced opposition due to AI risks and the cost burden on funds. Uyeda suggested extending compliance timelines to alleviate pressure.
This move comes amid a leadership transition at the SEC. Paul Atkins – who was nominated by President Donald Trump to be SEC Chairman in December 2024 – is expected to take over from Uyeda, although a Senate hearing has not yet been scheduled. Atkins, who has a more crypto-friendly perspective, could accelerate the process of 'dismantling' old regulations.
Crypto-Friendly Signals
Last week, Uyeda called for redefining the concept of 'exchange' to include decentralized exchanges (DEX) – a move showing the SEC is ready to adapt to blockchain realities. Additionally, in the early hours of Saturday (03/22/2025), the SEC's crypto task force will hold its first roundtable, discussing which cryptocurrencies qualify as securities. This is a sign that the SEC wants to clarify legal boundaries, rather than applying a 'blanket' approach as before.
This change coincides with pressure from the White House, demanding the SEC cut staff – although the plan remains unclear. Under Trump, who promised to bring crypto into the national reserve, the SEC seems to be shifting from confrontation to cooperation with the digital asset industry.
Impact on the Crypto Market
The U.S. Crypto Industry: The cancellation of custody regulations could encourage banks and financial institutions to engage more deeply, increasing liquidity and legitimacy for crypto. Investment firms would find it easier to manage digital assets without being bound by strict standards.
Global Market: If the SEC relaxes, the U.S. could lead a wave of crypto-friendly regulations, putting pressure on other countries – such as Vietnam (which is piloting a crypto exchange) – to accelerate their legal frameworks. This is particularly important as trading hovers around $83,000 (03/18/2025) and TVL RWA reaches $18.34 billion.
Remaining Risks: Despite optimism, the change process will not happen immediately. Delays in confirming Atkins and reactions from Congress (which is divided on crypto) could disrupt plans.
Conclusion: SEC Changes Direction, Does Crypto Breathe a Sigh of Relief?
The SEC's consideration to cancel custody regulations from the Biden era is a positive signal, reflecting a shift from control to support under pressure from the Trump administration. With the upcoming roundtable and leadership changes, the U.S. crypto sector may enter a new phase – more open, but still cautious. Is this a 'change in the wind' or just a temporary setback? The answer lies in the SEC's next decisions and their pace of enforcement.
Risk Warning: Crypto investment carries high risks due to price volatility. Please consider carefully before participating.