Industry Cheers as SEC Scraps Dozens of Gensler-Era Regulations

In a dramatic shift signaling a new era for Wall Street and beyond, the U.S. Securities and Exchange Commission (SEC) has announced the rollback of dozens of regulations implemented during the tenure of former Chairman Gary Gensler. The decision has drawn both applause and scrutiny, but one thing is clear: the financial industry is welcoming the move with open arms.

This regulatory reversal, announced in June 2025, follows growing criticism from business leaders, fintech innovators, and traditional financial institutions who claimed that Gensler-era policies were overly aggressive, burdensome, and stifled innovation. The rollback marks a clear pivot under current SEC leadership, promising a more market-friendly, innovation-centric regulatory environment.

A Long-Awaited Rollback

The new SEC Chair, Thomas H. Whitman, appointed earlier this year by the current U.S. administration, had hinted at a pro-business shift during his confirmation hearings. His statement, «We must regulate without suffocating,» now seems to have been a clear foreshadowing.

In total, 34 rules and interpretive guidelines from the Gensler administration are being repealed or revised. Key among them:

Tougher ESG (Environmental, Social, Governance) reporting mandates
Expanded surveillance requirements for crypto exchanges and DeFi platforms
Restrictions on payment-for-order-flow models
Tight disclosure rules for hedge funds and private equity managers

Each of these areas had become flashpoints under Gensler’s term, often pitting the SEC against industry leaders who claimed the commission was overreaching its mandate.

Wall Street Reacts: Optimism and Uptrend

Within hours of the announcement, financial markets responded with enthusiasm:

The S&P 500 closed up 1.8%, its biggest single-day gain in over a month
Financial sector ETFs surged, with XLF (Financial Select Sector SPDR Fund) gaining 3.1%
Shares of major firms like Goldman Sachs, BlackRock, and Robinhood jumped notably

The crypto market, which often clashed with Gensler’s SEC, also surged. Bitcoin briefly crossed the $101,500 mark, and Ethereum rebounded above $6,000 for the first time in weeks.

“This is a welcome breath of fresh air,” said Amanda Reynolds, Chief Legal Officer at a major fintech firm. “We’re seeing a shift back to principles-based regulation, which supports innovation instead of suppressing it.”

Key Changes at a Glance

Here are some of the most impactful repeals and adjustments:

1. ESG Reporting Softened

Gensler’s administration had introduced strict climate disclosure rules requiring companies to track and report Scope 3 emissions — often indirect and difficult to quantify. These rules will now be voluntary, with more flexible timelines for adoption.

2. Crypto Clarity & Relief

DeFi projects and centralized exchanges previously targeted by SEC lawsuits now benefit from an updated regulatory framework, which:

Allows for conditional registration without immediate enforcement risk
Introduces a sandbox environment for blockchain innovation
Scales back Know-Your-Customer (KYC) requirements on non-custodial wallets

3. PFOF Ban Reversed

The controversial move to restrict payment-for-order-flow (PFOF) practices — used by firms like Robinhood to offer commission-free trading — has been canceled. The SEC will instead issue new transparency guidelines for how orders are routed and executed.

4. Private Fund Disclosure Rolled Back

Hedge funds and private equity firms are no longer required to submit quarterly transparency reports detailing valuations, internal fees, and side-letter agreements. The rule had faced fierce opposition from fund managers.

A Win for Innovation and Capital Markets

Critics of the Gensler-era SEC long argued that it created a regulatory bottleneck, where companies—particularly in the tech and financial innovation sectors—found it nearly impossible to operate without fear of enforcement actions.

“This new direction reflects what markets have needed for years: regulatory certainty and breathing room,” said Tyler Hammond, CEO of a blockchain analytics startup. “You can’t build a modern financial system on yesterday’s rules.”

Small-cap public companies and startups also benefit. The new rules simplify IPO registration processes, reduce compliance costs, and introduce AI-friendly guidelines for reporting and risk management systems.

Criticism Still Lingers

Not everyone is celebrating. Consumer advocacy groups and environmental organizations have voiced concerns that the repeal of ESG mandates and DeFi surveillance rules could jeopardize investor protections and expose markets to greater risk.

“We’re deregulating at a time when climate risk and financial manipulation are more dangerous than ever,” said Linda Ashcroft of the Consumer Investors Alliance.

Former SEC Chair Gensler also responded publicly, cautioning against loosening guardrails:

“We built those rules to bring transparency and accountability into modern finance. Without them, we invite volatility, corruption, and instability.”

Global Repercussions

The SEC’s move is likely to ripple through global financial regulatory bodies. The European Union, which has adopted similar ESG and crypto regulations, may now face pressure from businesses to reconsider their own frameworks. Some speculate that Singapore and the UK might adopt lighter-touch approaches to remain competitive.

At the same time, U.S. companies listed abroad may now explore dual-listings in U.S. exchanges, encouraged by a friendlier regulatory climate.

What Comes Next?

The SEC has promised a 90-day comment period for stakeholders to provide input on additional adjustments. This signals that even more reforms may be coming in areas like:

AI use in financial advice and compliance
Tokenized securities and asset-backed NFTs
Digital identity and data privacy frameworks in fintech

The message is clear: Regulators are aligning with innovation, not standing in its way.

Conclusion: A New Chapter Begins

With this sweeping rollback, the SEC is rewriting its relationship with the markets. While some remain cautious, most of the financial industry sees this as a new era of opportunity, flexibility, and global leadership.