The US Securities and Exchange Commission (SEC) acting chair, Mark Uyeda, recently announced that the agency is re-evaluating its rulemaking process. The SEC will revisit a controversial proposal regarding crypto custody requirements for investment advisers that was earlier suggested during the Biden administration.
Discussing at the Investment Company Institute’s 2025 Investment Management Conference, Uyeda emphasized the need for regulations that are effective and cost-efficient, respecting the statutory authority limits. He hinted at a strategic shift toward a “back to basics” framework where the agency might consider withdrawing or re-proposing existing rules, including the 2023 crypto custody proposal, due to growing concerns among industry participants.
In February 2023, the SEC, under the previous leadership of Gary Gensler, approved an amendment to the 2009 Custody Rule. This change intended to expand the role of qualified custodians when registered investment advisers hold assets for clients, aiming to include virtually all assets, including cryptocurrencies. This proposal raised alarms, with many in the industry fearing it could hinder access to crypto as an investment class.
Uyeda expressed that the earlier custodial approach might obscure a decision to limit access to cryptocurrency investments. He stated, “This approach to custody appears to mask a policy decision to block access to crypto as an asset class.” As a result, he has instructed SEC staff to collaborate with the Crypto Task Force to explore suitable alternatives, potentially including the withdrawal of controversial proposals.
Furthermore, Uyeda highlighted that the Commission might consider extending or delaying compliance dates for several recently adopted rules. He criticized the previous administration’s regulatory approaches, suggesting that such methods have caused complications in subsequent litigation and created a tumultuous environment for investors.
Turning to future rulemaking, the Commission must act like a super-sized freighter, not a speed boat, ensuring a consistent, informed, and thorough public process.
The acting chair’s remarks come amidst a notable shift in the SEC’s handling of the crypto industry, particularly after the Trump administration. Over recent months, the SEC has paused or closed a significant number of key processes regarding crypto regulations, including ongoing lawsuits against major players like Binance, Coinbase, Kraken, and Robinhood. The agency has reportedly taken steps to prevent “rogue attacks” on the industry by mandating that all investigations need top-level approval, scaling back enforcement actions.
Moreover, Commissioner Hester Peirce, known for her favorable stance on cryptocurrency, indicated that the SEC would begin establishing foundational pieces of its new framework throughout the year. This plan marks a significant moment for both regulators and investors as they await clearer guidelines surrounding cryptocurrency regulations.
In conclusion, as the SEC navigates its rulemaking process, the industry will be monitoring closely to see how these potential changes will affect investment strategies and the overall landscape of cryptocurrency regulations in the US.
