Acting SEC Chair Mark Uyeda Seeks to Drop Rule That Targets DeFi Exchanges

Highlights

Uyeda directed SEC staff to explore abandoning Regulation ATS expansion on crypto.
SEC's proposed rule could have classified DeFi protocols as regulated exchanges.
Trump-era SEC quickly reversing Gensler’s crypto policies, easing regulations.

Acting U.S. Securities and Exchange Commission (SEC) Chair Mark Uyeda has announced a move to reconsider a proposed rule that could regulate decentralized finance (DeFi) exchanges. The rule, known as Regulation ATS, aimed to broaden the definition of an exchange to include communication protocols used in the crypto sector. Uyeda stated that he directed SEC staff to explore options for abandoning the portion of the proposal related to crypto, citing widespread public criticism.

SEC Chair Mark Uyeda Moves to Drop Rule Targeting DeFi Exchanges

In a recent development in crypto regulations, SEC Chair Mark Uyeda has asked agency staff to explore options for removing part of the proposed Regulation ATS. The rule sought to expand the definition of an exchange to include communication protocols in crypto markets.

Uyeda said that the proposal would have forced DeFi platforms to register as regulated exchanges. The move faced heavy opposition from the crypto industry, with concerns that it could impose excessive compliance burdens. Uyeda acknowledged the criticism and emphasized that the SEC should reconsider its approach.

Meanwhile, in other regulatory news, Thailand’s SEC has officially approved USDT as a recognized cryptocurrency. The decision allows virtual asset service providers in the country to offer Tether’s stablecoin on their platforms, expanding its accessibility for businesses and individuals.

Regulation ATS Expansion Could Have Classified DeFi as Exchanges

Regulation ATS was initially designed to regulate alternative trading systems but was revised under former SEC Chair Gary Gensler. The proposed changes could have extended its scope to DeFi platforms. This would have subjected decentralized exchanges to regulatory oversight similar to traditional financial markets.

Critics warned that the proposed rule could hinder innovation in decentralized finance. Industry leaders argued that forcing DeFi projects to comply with exchange registration and disclosure requirements could be impractical due to their decentralized nature. Uyeda recognized these concerns and indicated that the SEC may step back from its initial position.

Most recently, CoinGape reported that ConsenSys challenged the SEC’s proposed DeFi rule changes, arguing that they exceed the agency’s legal jurisdiction. The company contends that the amendments impose undue regulatory burdens on decentralized protocols, conflicting with existing legal frameworks. ConsenSys has called for the SEC to withdraw the rule entirely, citing risks to innovation and compliance complexities.

Trump-Era and Impact on Crypto Regulations

The SEC has taken a different approach to crypto regulations under the new administration. Uyeda’s move follows a series of policy reversals since the departure of former SEC Chair Gary Gensler. The agency recently rescinded strict crypto accounting guidance and dropped several enforcement actions against industry players.

The shift signals a more relaxed regulatory stance toward digital assets. With the Trump administration in office, the SEC appears focused on easing restrictions that critics viewed as overly aggressive. Uyeda’s latest decision continues this trend, as the agency re-evaluates its approach to crypto oversight.

More so, crypto regulations in the U.S. may see improved clarity as the SEC and CFTC strengthen their collaboration. This effort will eliminate past jurisdictional conflicts and create a more structured oversight framework for digital assets.

Recommended
Price Analysis

Best Crypto Presales To Invest In September 2025 – Top Upcoming Presale Tokens

Best Crypto AI Trading Bots In 2025

Top Meme Coins To Buy In September 2025

Ronny Mugendi

Ronny Mugendi is a seasoned crypto journalist with four years of professional experience, having contributed significantly to various media outlets on cryptocurrency trends and technologies. With over 4000 published articles across various media outlets, he aims to inform, educate and introduce more people to the Blockchain and DeFi world. Outside of his journalism career, Ronny enjoys the thrill of bike riding, exploring new trails and landscapes.

Why trust CoinGape: CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journalists and analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.

Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.