Mark Uyeda has encouraged his team to re-engage in discussions with the Treasury and the Federal Reserve to revisit the initial plans for government securities trading systems. Under Uyeda’s guidance, the SEC has paused legal actions against cryptocurrency firms and initiated a task force aimed at revising crypto regulations. On Monday, Uyeda announced that he has directed staff to retract part of a 2022 proposal that sought to broaden the definition of alternative trading systems (ATS) to encompass certain cryptocurrency companies. This decision signifies a notable shift in regulatory strategy under the SEC’s new Republican leadership.
The 2022 proposal, which was introduced during the Democratic administration, aimed to mandate that some crypto firms register as ATS, thereby subjecting them to more stringent oversight. This initiative faced backlash from the crypto community, which argued that it would impose burdensome compliance costs and hinder their operations. Uyeda, however, expressed that the approach taken in the proposal was misguided. “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 remarked during a speech to bankers.
Uyeda highlighted that the 2022 plan was an extension of previous efforts to regulate Treasury markets, and he has instructed his team to realign their focus on the original intent of those changes. He also called for renewed conversations with the Treasury Department, the Federal Reserve, and market participants to reassess the regulatory framework for government securities ATS. This pivot by the SEC aligns with broader policy changes under Republican leadership. Earlier this year, the agency established a crypto task force to evaluate and refine its approach to cryptocurrency regulation, which includes pausing or dismissing ongoing lawsuits against crypto firms initiated by previous administrations.
Uyeda’s directive marks a clear departure from the SEC’s earlier strategy of expanding oversight into the crypto markets. Although the 2022 proposal had not yet been finalized, its withdrawal indicates a preference for more focused regulatory actions. These changes reflect ongoing discussions about finding the right balance between protecting investors and fostering industry growth. Crypto firms, which previously faced increased scrutiny under Democratic leadership, are now experiencing a more balanced regulatory environment. However, the SEC’s revised approach will still require further review and final approval by the commission.
Uyeda’s actions underscore how political shifts can influence regulatory priorities, with the SEC now emphasizing targeted reforms rather than sweeping interventions in the crypto sector.
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