U.S. SEC Regulatory Trends

ChainCatcher news, according to The Block, the U.S. Securities and Exchange Commission officially withdrew several proposed rules on Thursday that would impose stricter regulations on DeFi and cryptocurrency custody.These proposals were made under the leadership of former Chairman Gary Gensler, who led the agency's "enforcement-oriented approach." The withdrawn proposals included a proposed amendment to Rule 3b-16 of the Exchange Act published in April 2023. This proposal aimed to broaden the definition of exchanges, specifically to include decentralized finance platforms under the regulation of national securities exchanges. The proposal faced criticism from various industry stakeholders.

The winter of U.S. regulation seems to be quietly receding, and a ray of "innovation exemption" has shone into the DeFi space.

Overview of the speech by SEC Chairman Paul S. Atkins at the "DeFi and the American Spirit" roundtable held in Washington, D.C.

ChainCatcher News, the U.S. Securities and Exchange Commission (SEC) has won a court victory of $1.1 million in a cryptocurrency fraud case, with the defendant failing to respond to the charges. A federal judge in Georgia issued a default judgment in favor of the SEC against Keith Crews. The SEC filed a lawsuit against Crews in August 2023, accusing him of participating in cryptocurrency fraud, but Crews did not respond or defend himself.Judge Tiffany Johnson ruled that Crews must pay over $1.1 million in financial penalties, which includes the return of $530,000 in net profits obtained from his alleged misconduct, nearly $51,000 in pre-judgment interest, and a $530,000 civil penalty. Additionally, the judge ruled that Crews is permanently banned from violating securities laws again.

ChainCatcher news, according to the official website, the U.S. Securities and Exchange Commission (SEC) has released a policy statement regarding PoS network staking activities, clarifying that three types of staking activities do not constitute securities issuance: 1) Self-staking (node operators using their own crypto assets to participate in network validation); 2) Third-party non-custodial staking (asset owners retain control, only delegating validation rights); 3) Compliant custodial staking (custodians strictly segregate client assets, not used for operations or re-hypothecation).The statement points out that the network rewards obtained from the above staking activities are considered compensation for validation services, rather than investment returns based on the efforts of others in managing and operating, and therefore do not meet the securities definition standards of the Howey test. It also clarifies that four types of supporting services (penalty insurance, early unbonding, reward restructuring, asset aggregation) do not change the nature of staking. This policy does not apply to staking services that provide fixed returns or engage in trading using client assets.The SEC emphasizes that custodial institutions must ensure that staking assets: 1) are independent of operating funds; 2) are prohibited from being lent or re-hypothecated; 3) are not subject to third-party claims. This policy aims to provide regulatory certainty for compliant staking activities while maintaining enforcement authority over security tokens.

ChainCatcher news, according to Cointelegraph, the new chairman of the U.S. Securities and Exchange Commission (SEC), Paul Atkins, stated in a speech on May 19 that this is a "new era" for the cryptocurrency industry.Atkins pointed out that "the crypto market has been stagnant in the SEC's regulatory gray area for years," and emphasized that under his leadership, the SEC will return to its fundamental mission of "promoting rather than stifling innovation." He has instructed the commission's various policy divisions to begin drafting rule proposals related to cryptocurrencies while continuing to "clear obstacles" through staff-level statements.

ChainCatcher news, according to Cointelegraph, the U.S. Securities and Exchange Commission (SEC) has released a Frequently Asked Questions (FAQ) document regarding activities related to crypto assets and distributed ledger technology.It clarifies that brokers holding non-securities crypto assets are not subject to the holding and control requirements of Rule 15c3-3 and are not protected by SIPA; the net capital treatment for Bitcoin and Ethereum applies to crypto asset spot ETPs.Commissioner Hester M. Peirce stated that the FAQ provides initial guidance for the market, but further refinement is still needed.

ChainCatcher news, according to The Block, the U.S. Securities and Exchange Commission (SEC) announced it will delay its decision on BlackRock's Bitcoin ETF physical subscription mechanism and has begun soliciting public opinions. If approved, this mechanism would allow investors to directly subscribe and redeem ETF shares with Bitcoin instead of cash, enhancing trading efficiency.The rule amendment submitted by Nasdaq in January shows that the iShares Bitcoin Trust intends to adopt this model, but the SEC has previously favored a cash settlement mechanism. On the same day, the SEC also delayed the approval of Grayscale Litecoin Trust and Grayscale Solana Trust, requesting public input. On Tuesday, the SEC also sought public opinions on the 21Shares Dogecoin ETF.