SEC’s Crypto Rule: A Comedy of Errors or Just a Bad Joke? 😂

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In a twist worthy of a theatrical farce, the U.S. Securities and Exchange Commission, under the watchful eye of Acting Chairman Mark Uyeda, is contemplating the audacious act of abandoning a rule that, like a poorly written play, expanded the definition of exchanges to ensnare crypto firms. Oh, the drama! 🎭

This regulation, birthed in the year 2020, was initially intended to refine the oversight of Alternative Trading Systems. However, in a plot twist that would make even the most seasoned playwright gasp, former SEC Chair Gary Gensler decided to broaden its scope to include crypto platforms. Because why not throw a little chaos into the mix? 🤷‍♂️

At the Institute of International Bankers’ Washington Conference on March 10, Uyeda, with the gravitas of a Shakespearean hero, declared that the rule’s expansion was a “mistake.” He has since summoned the SEC staff to explore the possibility of dropping the crypto-related provisions, as if they were a bad habit.

Uyeda elaborated, revealing that the rule was originally crafted to enhance transparency and oversight of Government Securities ATSs. Yet, under Gensler’s reign, it veered off into a “very different direction,” much like a wayward ship lost at sea. 🚢

He pointed out the vague wording in the 2022 version of the rule, which included the enigmatic phrase “communications protocols” without a clear definition. This ambiguity, he argued, could have inadvertently subjected a plethora of crypto-related platforms to the heavy hand of exchange regulations. Talk about a plot hole! 📖

The revised rule, a product of Gensler’s imagination, could have forced certain crypto platforms to register as exchanges, even if they were merely masquerading as communication protocols or decentralized networks. A classic case of mistaken identity! 🎭

Uyeda lamented that it was a “mistake” for the SEC to tether Treasury market regulations to what he described as a “heavy-handed attempt to tamp down the crypto market.” Because nothing says “we care” like a little regulatory overreach! 🙄

Moreover, public feedback on this expanded definition of an exchange was overwhelmingly negative, according to Uyeda. In light of this, he has directed SEC staff to explore options for abandoning this part of the proposal while revisiting the original goal of regulating Government Securities ATSs. A noble quest, indeed! 🏰

Uyeda’s remarks come as the agency has dropped several enforcement cases against crypto firms, including the infamous Gemini and Kraken, and has launched a new task force focused on crafting clearer regulations for digital assets. A refreshing change of pace, wouldn’t you say? 🌬️

The agency seems to be reassessing several policies that previously put crypto in its crosshairs, rolling back measures introduced during Gensler’s tenure. Under his leadership, the SEC took an aggressive enforcement approach, launching over 100 enforcement cases against crypto firms. A veritable onslaught! ⚔️

As previously reported by crypto.news, the SEC has also stepped back in its broker-dealer rule case. On Feb. 20, the agency withdrew its appeal against a Texas court ruling that struck down the rule, which sought to classify certain DeFi platforms, liquidity providers, and market makers as dealers, subjecting them to registration requirements. A plot twist worthy of a grand finale! 🎉

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2025-03-11 09:38