SEC to Drop Rule Requiring Crypto Exchanges to Register as ATSs

Highlights:

• SEC explores abandoning crypto exchange registration proposal after public backlash.
• Mark Uyeda directs SEC staff to reconsider crypto platform ATS rule expansion.
• Uyeda seeks industry-friendly policies, reversing Gensler’s harsh crypto stance.

On March 10, Acting SEC Chairman Mark Uyeda announced that the Commission is considering abandoning a proposal that would require certain crypto firms to register as exchanges. At the 2025 Annual Washington Conference of the Institute of International Bankers, Acting SEC Chairman Mark Uyeda told bankers he had asked SEC staff to explore options for removing part of a proposed rule. 

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Acting Chairman Mark Uyeda gave remarks to the 2025 Annual Washington Conference of the Institute of International Bankers: https://t.co/Exsqpel7MC pic.twitter.com/n17B7ypK7W

— U.S. Securities and Exchange Commission (@SECGov) March 10, 2025

The SEC introduced the proposal in 2022 to increase its oversight of cryptocurrency markets. The plan required some crypto platforms to register as alternative trading systems (ATSs). ATSs are platforms where financial assets are traded. 

Uyeda mentioned that there had been significant negative public feedback on the definition of exchange concerning crypto. As a result, he had asked SEC staff to explore options for abandoning that part of the proposal. “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,” he added.

Reversing Gensler’s Policies

Uyeda highlighted that the initial proposal to amend ATS rules was introduced in 2020 under former SEC Chair Jay Clayton. However, in 2022, under Gensler’s leadership, the agency expanded the proposal to include certain crypto firms under the ATS framework. This move faced criticism from the industry, as it would have imposed increased regulatory scrutiny and additional compliance requirements on these firms.

He added:

“The new definition of the term exchange included communications protocols without clearly defining what that term meant. Effectively, the vastly expanded definition of an exchange would have picked up various protocols used with respect to crypto assets.” 

To address concerns, he gave two instructions to SEC staff. First, he asked them to reconnect with the Treasury Department, the Federal Reserve, and key market players to review whether changes to Government Securities ATSs should move forward. Second, he directed staff to find ways to drop the controversial plan to expand the ATS definition for crypto firms.

Shift in SEC Leadership Brings Industry-Friendly Crypto Policies

Gensler was tough on crypto during his time at the SEC. He filed over 100 actions against firms from 2021 until he resigned on Jan. 20. That day, Trump started his second term as president. During the election campaign last year, Trump had said he would fire Gensler if elected.

The Trump administration has taken a different approach, focusing on more industry-friendly policies. As part of this change, Uyeda started a crypto task force on Jan. 21. It will create a clearer legal framework, set up registration processes, and develop disclosure rules. The Crypto Task Force will also hold its first meeting later this month. This is an important step in changing the regulatory approach for digital assets.

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