In a widely anticipated move, the SEC withdrew 14 Gensler-era rule proposals that touched on critical – and controversial – rulemaking areas like AI governance, crypto, cybersecurity, and ESG.

Many of those pending rules, which were proposed between March 2022 and November 2023, were criticized by the agency’s conservative commissioners and industry participants alike for lacking statutory authority, lacking sufficient time for comment, and raising compliance burdens without obtaining commensurate benefits.

And in the era of Loper Bright, challenges to the rules’ statutory authority may have doomed many of the nascent rules even if they were not withdrawn, a concern made more salient after the Fifth Circuit Court of Appeals vacated the SEC’s Private Fund Adviser Rule in June 2024.

The withdrawals highlight the SEC’s new commitments to increase private access to capital markets, rein in onerous reporting requirements, and introduce industry-friendly regulatory frameworks for crypto.

Some of those rules are speculated to now be rewritten from the ground up in a more tailored manner, especially those related to crypto custody and trading. But the SEC made clear that any reformulations of the original rule proposals would have to undergo a fresh notice-and-comment process.

If the SEC “decides to pursue future regulatory action in any of these areas, it will issue a new proposed rule,” the agency stated.

But more contentious rule proposals, such as those related to ESG disclosures or sweeping AI and cybersecurity requirements, are unlikely to be revived in a familiar form in the near future.

The withdrawals, which were recommended by the House Financial Services Committee in April, were were applauded by Chair French Hill (R-AR).

“For too long, consumers and financial institutions have faced unnecessary burdens imposed by overreaching federal regulators. This announcement is a meaningful step towards restoring balance, protecting investors, and encouraging innovation. I look forward to working alongside Chairman Atkins to usher in a new era at the agency that prioritizes transparency and accountability,” he said.