SEC Withdraws Gensler-Era Crypto and ESG Proposals

The U.S. Securities and Exchange Commission has reversed course on several high-profile regulatory proposals introduced under Chair Gary Gensler''s leadership. The withdrawn measures include an expanded Custody Rule that would have imposed stricter requirements on crypto asset custodians, a controversial redefinition of exchanges under Rule 3b-16 that threatened to ensnare decentralized finance platforms, and enhanced environmental, social, and governance disclosure mandates.

Market participants interpret the SEC''s retreat as signaling a more pragmatic approach to digital asset regulation amid growing industry pressure for clearer guidelines. The decision comes as lawmakers increasingly question the commission''s aggressive enforcement strategy against crypto firms. Industry advocates have welcomed the development as potentially creating more favorable conditions for blockchain innovation while maintaining necessary investor protections.