The acting head of the US Securities and Exchange Commission (SEC) has directed staff to explore scrapping a plan that would have imposed stricter rules on cryptocurrency firms.

The proposal, introduced in 2022, aimed to classify certain crypto firms as alternative trading systems, subjecting them to increased oversight.

However, SEC Acting Chairman Mark Uyeda now considers this move a mistake, particularly as it was tied to Treasury market regulations.

Uyeda argued that linking government securities regulation with the crypto sector created unnecessary burdens. Speaking to bankers, he stressed the importance of separating the two and has asked SEC staff to revisit discussions with financial regulators about the original Treasury market plans.

The shift comes amid a broader change in the SEC's approach to crypto under Republican leadership. In January, the agency formed a dedicated crypto task force and has begun pausing or dropping lawsuits against crypto firms, signalling a major policy shift towards a more industry-friendly stance.

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