TLDR

The SEC issued an exemptive order on October 31 that delays Regulation NMS compliance deadlines until 2026 for traditional equity markets.
The order provides crypto exchanges with a legal precedent to argue for relief in ongoing enforcement cases.
Chairman Paul Atkins cited appropriations lapses and the need for orderly market functions as reasons for the delay.
Kraken, Bittrex, and Binance have already raised fair-notice defenses in their SEC enforcement cases.
Judge William Orrick allowed Kraken’s fair-notice defense to proceed in January 2025.

The SEC issued an exemptive order on October 31 that delays compliance deadlines for Regulation NMS until 2026. The order addresses traditional equity markets but provides crypto exchanges with a precedent for fair-notice arguments. Chairman Paul Atkins described the relief as necessary for orderly market functions during regulatory uncertainty.

SEC Grants Relief to Traditional Markets

The order postpones compliance deadlines for US equity trading rules until February and November 2026. The SEC cited a lapse in appropriations and the need to facilitate orderly market operations. A court denied a stay petition, which prompted the agency to issue temporary exemptive relief.

The relief covers tick-size rules, access-fee caps, and transparency mandates for traditional exchanges. Nasdaq and the New York Stock Exchange receive breathing room while appropriations remain frozen. The SEC acknowledges that exchanges cannot implement changes during a funding lapse.

The exemptive order references contested rules and constrained resources as reasons for delayed compliance. This procedural decision establishes a framework that crypto platforms can cite in ongoing litigation. The agency’s own acknowledgment creates a template for digital asset venue defenses.

Crypto Exchanges Invoke Fair Notice Defense

Kraken, Bittrex, and Binance have argued fair-notice principles in their SEC enforcement cases. These platforms contend that the agency has not provided clear guidance on compliance standards. Judge William Orrick allowed Kraken’s fair-notice defense to proceed in January 2025.

Bittrex claimed in June 2023 that it lacked fair notice about exchange registration requirements. The SEC sued these platforms for operating unregistered exchanges without establishing rules specific to cryptocurrencies. Binance raised similar due-process arguments in its defense against the regulator.

The Third Circuit amplified this critique when it remanded Coinbase’s rulemaking petition in January 2025. Judge Stephanos Bibas wrote that the SEC sues crypto companies without guiding how to comply. This judicial observation directly relates to the regulatory opacity addressed by today’s order.

Legal Precedent Applies to Digital Asset Cases

The procedural parallels between traditional markets and crypto exchanges are direct and enforceable. The SEC has brought enforcement actions against digital asset platforms for three years without finalizing compliance rules. Platforms argue they cannot comply with standards that do not exist in written form.

The agency grants multi-month relief to equity markets because participants need regulatory clarity and time. Crypto litigators will cite this order in motions for stays and preliminary injunction hearings. The exemptive relief demonstrates that enforcement without finalized rules creates operational chaos.

The relief runs until February 2026 for fee-determinability rules and November 2026 for other provisions. Crypto cases will continue to litigate fair notice and due process during this period. Defense motions can now reference the Commission’s acknowledgment about delayed compliance serving orderly markets.

Regulation NMS governs minimum pricing increments, exchange access fees, and quote transparency in US equities. The SEC adopted amendments in December 2022 but stayed portions pending judicial review. The D.C. Circuit denied the petition for review, which would have triggered compliance on November 3.

The Commission issued temporary exemptive relief instead of enforcing immediate compliance deadlines. Exchanges cannot reasonably implement changes during a funding lapse and contested rulemaking process. This creates a template for crypto venues navigating enforcement while the agency drafts frameworks.

Coinbase, Kraken, and Binance fought enforcement actions while waiting for crypto-market-structure rules. These rules still do not exist in finalized form from the regulator. The theory holds that punishing noncompliance without explicit instructions violates constitutional due process.

The order does not mention blockchain or tokens but codifies the logic crypto defendants use. Enforcement without finalized rules requires relief as the proper remedy for affected market participants. If the SEC finalizes crypto-market-structure rules, similar exemptive orders will likely follow this precedent.

Crypto lawyers now have a roadmap for litigation that leads through the exemptive-relief process. The Commission used this same process to buy time for traditional equity exchanges. The procedural logic remains identical across both traditional and digital asset markets.

The post SEC Exemptive Order Creates Unexpected Win for Crypto Platforms appeared first on Blockonomi.

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Filed under: Bitcoin - @ November 1, 2025 10:20 pm