These proposals were introduced during Gary Gensler’s tenure as agency leader, from March 2022 to November 2023.

On June 12, the SEC stated that it has no plans to finalize those rules and may propose new ones later if necessary.

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One of the scrapped rules, known as Rule 3b-16, would have changed how the SEC defines a securities exchange. The updated definition would have included platforms that use communication tools to connect buyers and sellers, which could have placed many decentralized finance (DeFi) systems under SEC control.

Critics warned that this rule could have forced developers and users of these systems to follow rules meant for large, centralized exchanges.

Another withdrawn proposal focused on tightening rules for how investment firms store customer assets. It was introduced in March 2023 and aimed to expand existing custody rules to cover more types of assets, including cryptocurrencies.

If approved, the rule would have required investment advisers to store all client assets, including digital tokens, with “qualified custodians”. These custodians are usually regulated banks or broker-dealers.

Since many crypto exchanges and wallet providers do not meet the SEC’s definition of a qualified custodian, the rule could have forced investment firms to transfer their clients’ assets to different providers or withdraw from the crypto market altogether.

Meanwhile, SEC Chair Paul Atkins shared an idea called ‘DeFi and the American Spirit’ during a June 9 discussion hosted by the SEC’s crypto task force. What did he say? Read the full story.

The rule would have required decentralized finance (DeFi) platforms to report user transactions to the Internal Revenue Service (IRS).

The original policy, planned for 2027, aimed to expand the IRS’s authority. It would have forced DeFi protocols to share information about crypto sales and the people involved. This included reporting gross proceeds and user data, which many in the crypto industry saw as invasive.

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The Blockchain Association, a major crypto advocacy group, welcomed the decision. The group’s CEO, Kristin Smith, said in an April 11 post on X that developers and entrepreneurs can continue working without fear of new restrictions.

She called the original rule damaging and said it could have seriously hurt the US crypto industry.

President Trump officially removed the rule by signing the resolution. According to Representative Mike Carey, who supported the measure, this marks the first time a crypto-related bill has been signed into law. He criticized the rule for putting too much pressure on the IRS and threatening user privacy and innovation.

Critics of the rule said it treated decentralized platforms like traditional financial brokers, despite the fact that they operate differently.

Meanwhile, the central bank digital currency (CBDC) Anti-Surveillance State Act passed the House Financial Services Committee with a close vote of 27–22. What does the bill entail? Read the full story.