The U.S. Securities and Exchange Commission (SEC) is reconsidering its approach to regulating the cryptocurrency industry. Acting Chairman Mark Uyeda announced on March 10, 2025, that the SEC is evaluating plans to abandon a 2022 proposal requiring certain crypto firms to register as Alternative Trading Systems (ATS). This proposal aimed to expand oversight by placing digital asset platforms under the same regulatory framework as traditional trading systems, sparking significant opposition from the crypto sector.

Uyeda, speaking at the 2025 Annual Washington Conference of the Institute of International Bankers, described the proposal as a misstep. He criticized its attempt to link Treasury market regulations with heightened crypto oversight, calling it a "heavy-handed" approach to curbing the crypto market.

The original plan sought to classify centralized exchanges and even decentralized finance (DeFi) protocols as ATS, requiring them to comply with stringent rules. However, Uyeda emphasized the importance of separating Treasury market reforms from crypto regulation. He has directed SEC staff to renew discussions with the Treasury Department and Federal Reserve about revisiting the original Treasury-focused regulatory plans.

This shift reflects a broader change in the SEC’s stance under new leadership. The agency has paused or dismissed several enforcement cases against crypto firms and launched a Crypto Task Force led by Commissioner Hester Peirce. The task force aims to prioritize public feedback and develop clear regulatory policies for the crypto industry.

The SEC’s evolving approach signals a willingness to collaborate with stakeholders and craft balanced regulations that encourage innovation while ensuring investor protection.