The U.S. Securities and Exchange Commission (SEC) is considering withdrawing a proposal to tighten requirements for the custody of Cryptoassets, marking the latest move by SEC Chair Mark Uyeda under the Trump administration. Uyeda said that many public comments have expressed significant concerns about the proposed rule issued in February 2023, which would require registered investment advisers to custody Cryptoassets with a qualified custodian and comply with strict criteria. "Given these concerns, proceeding with the initial proposal may face significant challenges," Uyeda said on Monday at the Investment Company Institute's 2025 Investment Management Conference in San Diego. "Therefore, I have directed SEC staff to work closely with the Crypto Assets Working Group to consider appropriate alternatives." Uyeda's remarks focused primarily on the SEC's rulemaking process, including the potential to withdraw, repropose, or delay the compliance timeline for new regulations. The custody rule was proposed under the Biden administration, when Gary Gensler led the SEC, to expand the current custody requirements to include all client assets held by investment advisers, and add additional safeguards for those assets. Under current rules, investment advisers must hold client assets with a qualified custodian, such as a bank or broker-dealer. The new rule would extend this standard to the Cryptoasset space, raising concerns that banks may limit services to this industry. When the proposed rule was issued, many Republican lawmakers, Cryptoasset companies, and traditional financial institutions voiced opposition. A coalition of banking and financial trade associations, including the American Bankers Association, warned that the regulation "could significantly impact their business operations." Uyeda's move to reconsider the custody rule marks the second time this month that the SEC Chair has directed staff to re-evaluate existing regulations. Last week, he also ordered a review of a proposed amendment to the definition of an "exchange," which could impact decentralized Cryptoasset projects. Both actions signal a shift in policy direction under the Trump administration. Previously, under the Biden administration, former Chair Gensler had asserted that most Cryptoassets, except BTC, are securities. Since the Trump administration took over, the SEC has quickly changed its stance on Cryptoassets. In recent weeks, the agency has withdrawn controversial accounting guidance on Cryptoassets, rescinded enforcement actions against several industry firms, established a Crypto Assets Working Group, and issued a statement on memecoins. The working group will hold its first roundtable discussion on Friday to discuss the "definition of a security for digital assets."