The US SEC rescinds 14 rules the agency proposed under the Biden Administration, including one recategorizing DeFi protocols and one about digital asset custody
The SEC has withdrawn over a dozen rules the agency proposed under Joe Biden, including two crypto-related rules targeting DeFi and digital asset custody.
Context & Ripple Effects
The withdrawal reverses part of an earlier SEC agenda that explicitly sought to bring digital-asset and DeFi exchanges into a broader regulatory framework through a reopened exchange-rule proposal. It follows the agency's January repeal of SAB 121's bank balance-sheet treatment for token custody.
Taken together with the SEC's March decisions to dismiss or pause several crypto cases, the move matters as a further rollback of policy instruments directed at crypto markets. The custody element also retreats from the agency's earlier effort to limit advisers' use of unregistered crypto custodians.
First-order effects
- The proposed DeFi recategorization and digital-asset custody requirements are no longer live SEC rulemaking paths, removing those specific prospective compliance burdens for affected protocols, custodians and advisers.
- The SEC must use a different proposal or another regulatory route if it wants to pursue comparable requirements.
Second-order effects
- Crypto firms that had been planning around these proposals can reassess compliance, product and custody arrangements, while regulated incumbents lose a near-term rulemaking advantage that clearer custody standards might have provided.
- The reversals leave the boundaries for DeFi intermediation and crypto custody less settled, shifting attention from these proposed rules to whatever replacement guidance or rulemaking the SEC chooses to advance.
Third-order effects
- If this sequence persists, US crypto oversight may move away from the prior effort to extend existing securities-market rules directly into DeFi and custody, toward narrower or differently framed interventions.
- That could make jurisdictional product design more important: firms will continue to structure offerings around an evolving mix of agency actions rather than a single settled SEC framework.
The trend: This is one data point in a broader reset of SEC crypto policy, with Biden-era rulemaking and enforcement positions being reconsidered rather than carried forward unchanged.