Golden Finance reports that, as disclosed by crypto journalist Eleanor Terrett, the U.S. Securities and Exchange Commission (SEC) officially abolished the extended Custody Rules proposal and Rule 3b-16, as well as other Gensler-era rules recently. This move is like a huge rock thrown into the surface of the cryptocurrency market, causing ripples and drawing widespread attention both within and outside the industry.
Among them, the proposal for the “Custody Rules” has been highly controversial since its release. This rule aims to cover all customer assets, including cryptocurrencies. Its significant expansion of the definition of “custody” has raised many concerns in the industry. In particular, the issue of whether certain state concessionaires should be recognized as qualified custodians has remained unresolved, bringing great uncertainty to the cryptocurrency custody business. Nowadays, with the abolition of this proposal, the related business is expected to embrace new development opportunities. Previously, many cryptocurrency custody service providers were hesitant to expand their business due to concerns that they would not be able to meet the strict requirements of this rule. Now, with the removal of policy obstacles, these providers may re-examine their business layout, increase investment, and promote the development of cryptocurrency custody business in a more standardized and efficient direction.
“Rule 3b-16” also has a profound influence. This rule proposes to regulate decentralized finance (DeFi) exchanges/platforms as national stock exchanges. If this regulation is implemented, it will undoubtedly have a huge impact on the DeFi industry. The core features of the DeFi ecosystem lie in its decentralization, autonomy and innovation. Once it is incorporated into the strict regulatory framework of a national stock exchange, many innovative business models and application scenarios may be restricted. The abolition of Rule 3b-16 this time has brought relief to the DeFi industry. Many DeFi projects are expected to continue exploring and advancing on the path of innovation, further promoting the popularization and development of decentralized financial services. For instance, some lending and trading platforms based on smart contracts, after getting rid of the potential excessive regulatory constraints, can more freely optimize product design, enhance user experience and attract more users to participate.
The SEC also abandoned the proposal to require listed companies to comply with enhanced environmental, social and governance (ESG) reporting requirements. Although this move has no direct causal connection with the cryptocurrency market, from a macro perspective, it reflects a shift in the SEC’s regulatory thinking. Under the current economic situation and political environment, this series of rule abolition actions by the SEC might be aimed at creating a more relaxed and flexible market environment to promote financial innovation and economic growth.
The abolition of this series of rules is undoubtedly a major boost for the cryptocurrency market. Over the past period of time, the strict regulatory policies implemented by the SEC during the Gensler era have exerted tremendous compliance pressure on the cryptocurrency industry. Many cryptocurrency enterprises are struggling in a complex regulatory environment, and even some innovative projects have been forced to be put on hold due to their inability to meet regulatory requirements. Nowadays, with the abolition of some key rules, the development space of the cryptocurrency market is expected to be released. Investors’ confidence may be boosted, and more funds may flow into the cryptocurrency sector, promoting innovation and development in the industry. For instance, some institutional investors who were originally adopting a wait-and-see attitude due to regulatory uncertainties might reevaluate the feasibility of investing in cryptocurrencies, injecting new vitality into the market.
Of course, the abolition of the rules does not mean the absence of supervision. The SEC may still regulate the cryptocurrency market through other means in the future to ensure its fairness, impartiality and transparency, and protect the legitimate rights and interests of investors. However, this move to abolish the rules undoubtedly brings new opportunities and challenges to the cryptocurrency market. Industry participants need to closely monitor policy developments, grasp market changes, and achieve sustainable development under the premise of compliance.
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