Shifts Stance on Firm Registration and Eases Market Regulation

The Securities and Exchange Commission under Donald Trump is demonstrating its commitment to regulatory clarity in the crypto space.  The new administration has dropped a slate of pre-existing lawsuits, looks set to approve new crypto ETFs and has made a couple of regulatory changes to date.

Next on the list, according to Acting Chair Mark Uyeda, is a 2022 proposal that regulated DeFi exchanges as ‘Alternative Trading Systems’. This classification meant crypto firms were regulated in the same breath as certain securities and equity trading platforms.

But Uyeda has announced the SEC is looking at ways to eliminate this proposal, as the Trump-led US Government examines purpose-built legislation for the digital asset sector.

Related: Mixed Reactions to White House Crypto Summit from Crypto Community

Decentralised Exchanges Regulated as Traditional Trading Platforms Under Old Policy

The initial proposal introduced in 2022 intended to give the SEC more control over the cryptocurrency sector by aligning some Web3 firms with traditional securities exchanges.

However, the crypto industry was strongly against this decision, something Uyeda noted when revealing his plans.

In my view, it was a mistake for the Commission to link together regulation of the Treasury markets with a heavy-handed attempt to tamp down the crypto market.

Mark Uyeda, Acting Chair of the SEC

Particularly, the SEC’s attempt to bring decentralised exchanges under their watch drew ire from players in the industry.

Through this haphazard rulemaking, the SEC inappropriately attempts to bring crypto trading platforms, including DEXs, under its remit and regulate them as securities exchanges.

Rodrigo Seira, ex-Legal Counsel at Paradigm

SEC Picking up the Pieces of Crypto Industry Relationship

Uyeda’s move comes as the SEC makes broader strides toward easing crypto regulation in the United States.

After years of a ‘regulation by enforcement’ policy under ex-Chair Gary Gensler, the 2025 financial watchdog has a strong desire to amend its relationship with the digital asset industry.

The SEC will work with the closely aligned Crypto Task Force to investigate how to best maintain the decentralised ideals of Web3 while protecting consumers from bad actors like Sam Bankman-Fried. 

The potential removal of policing DEXs as Alternative Trading Systems is one in a long line of policy shifts under the SEC that aim to inspire confidence among the crypto industry.