Acting SEC Chair Mark Uyeda announced that he has directed agency staff to reconsider and potentially abandon a controversial proposal that would have expanded Regulation ATS to cover crypto exchanges and decentralized finance protocols.
Speaking at the 2025 Annual Washington Conference of the Institute of International Bankers, Uyeda criticized the original proposal, saying it wrongly conflated crypto markets with traditional financial regulations. The rule was initially designed to increase oversight of alternative trading systems, but it morphed into a broad regulatory expansion under former SEC Chair Gary Gensler, targeting decentralized exchanges and blockchain-based trading platforms.
Uyeda claimed that the SEC had received overwhelming public opposition to the expanded definition of “exchange,” which could have forced many DeFi projects into compliance with traditional securities regulations.
In his remarks, Uyeda described the proposal as a misstep, arguing that it unfairly attempted to merge regulations designed for Treasury markets with a heavy-handed crackdown on crypto markets. He acknowledged that the SEC must carefully reconsider how it approaches digital asset regulation, stating that he has formally requested options from SEC staff on withdrawing the controversial aspects of the proposal.
SEC’s Regulatory U-Turn Under Trump
Uyeda’s announcement is the latest in a series of SEC policy reversals following former SEC Chair Gary Gensler’s exit and the arrival of the Trump administration. Since taking office, the SEC has made several sweeping changes to its approach toward crypto regulation, moving away from Gensler’s aggressive enforcement stance.
One of the most notable shifts has been the rescinding of the controversial SAB 121 accounting guidance, which previously required companies to list customer crypto holdings as liabilities. Additionally, the SEC has dropped enforcement actions against major crypto firms, including its high-profile lawsuits against Coinbase and ConsenSys.
