SEC Signals Shift in Crypto Oversight as Uyeda Moves to Scrap ATS Proposal
In a significant policy shift, Acting Chairman Mark Uyeda announced on March 10 that the U.S. Securities and Exchange Commission (SEC) is reconsidering a 2022 proposal that would require certain crypto firms to register as alternative trading systems (ATS). This move signals a potential easing of regulatory pressure on digital asset platforms.
During the “2025 Annual Washington Conference of the Institute of International Bankers,” Uyeda disclosed that he had instructed SEC staff to explore ways to abandon this provision, though no final decision has been made.
The original proposal sought to expand the SEC’s oversight by classifying some crypto firms under the same regulatory framework as traditional trading platforms. This would have extended the ATS definition to encompass centralized exchanges and even some decentralized finance (DeFi) protocols—a move that met strong resistance from the crypto industry.
Uyeda acknowledged concerns over the scope of the proposal, stating that bundling crypto regulation with Treasury market reforms was a flawed approach. He emphasized:
“In my view, it was a mistake for the Commission to link together regulation of the Treasury markets with a heavy-handed attempt to tamp down the crypto market.”
Crypto Industry Applauds Decision
Uyeda’s stance has been met with support from key industry figures. Bill Hughes, a lawyer at Consensys, described Uyeda’s call to abandon the ATS proposal for DeFi platforms as “heartening.” Similarly, the U.S. House Committee on Financial Services welcomed the announcement in a statement shared on X (formerly Twitter).
In a further step toward recalibrating regulatory efforts, Uyeda has directed SEC staff to reopen discussions with the Treasury Department, the Federal Reserve, and market participants to reassess original plans for overseeing alternative trading systems in government securities markets.
New Regulatory Approach Takes Shape
Under the evolving SEC leadership, the agency appears to be taking a more collaborative approach to crypto oversight. Uyeda’s announcement aligns with recent remarks from Commissioner Hester Peirce and acting Commodity Futures Trading Commission (CFTC) Chair Caroline Pham, who confirmed increased cooperation between the two regulators on crypto-related matters.
Peirce has stressed the importance of engaging with the crypto industry, noting that those affected by regulations should have a role in shaping them. To this end, the SEC’s Crypto Task Force, led by Peirce, will hold a series of public roundtables to solicit industry feedback on regulatory measures.
Additionally, the task force has been in discussions with crypto firms on issues such as allowing staking in exchange-traded products (ETPs), signaling a willingness to consider industry perspectives in future rulemaking.
This latest development underscores a potential shift in the SEC’s regulatory posture, moving away from rigid oversight toward a more open dialogue with the crypto sector. However, the final decision on the ATS proposal remains pending, leaving the industry to watch closely for further updates.