TLDR
SEC delays NMS compliance deadlines, offering crypto exchanges more time to comply.
Crypto exchanges gain legal advantage with SEC’s delay in enforcement actions.
SEC’s exemptive relief in NMS case strengthens due process arguments for crypto.
Delay in equity market rules sets precedent for crypto exchanges’ legal defenses.
The U.S. Securities and Exchange Commission (SEC) recently granted a delay in compliance deadlines for Regulation NMS, which affects the equity trading market. This delay, extending into 2026, could have important legal consequences for crypto exchanges such as Coinbase, Kraken, and Binance. These exchanges, facing SEC enforcement actions, now have a new line of defense based on the SEC’s own actions, potentially strengthening their legal positions in court.
SEC Grants Delay for Equity Markets
On October 31, 2025, the SEC issued an exemptive order delaying the compliance deadlines for certain provisions of Regulation NMS. These regulations govern U.S. equity markets, including rules about minimum pricing increments, access fees, and transparency.
The delay was granted until February and November 2026, citing ongoing judicial review and funding lapses within the agency. According to SEC Chairman Paul Atkins, the relief was essential to “facilitate orderly market functions” amid regulatory challenges and a partial government shutdown.
The SEC’s decision impacts traditional stock exchanges, including Nasdaq and the New York Stock Exchange (NYSE). However, the broader significance lies in how this order could be applied to crypto exchanges that are under SEC scrutiny. Crypto exchanges have long argued that they need clearer rules and more time before being held to securities regulations. This delay now serves as a precedent for those platforms, providing a basis for requesting similar delays in their cases.
A New Argument for Crypto Defendants
For crypto platforms like Kraken, Binance, and Coinbase, the SEC’s delay offers a new argument in their ongoing legal battles. These exchanges have consistently raised “fair notice” and due process defenses when facing SEC enforcement actions.
Their central argument is that the SEC cannot fairly enforce securities laws without providing clear and finalized rules for the crypto market. They contend that the lack of specific guidelines leaves them in a state of uncertainty, making it difficult to comply with the regulations.
The SEC’s decision to delay enforcement for equity markets, due to similar concerns about regulatory uncertainty, mirrors the arguments crypto defendants have made. These platforms claim that enforcement actions for failing to comply with unclear or incomplete regulations would violate their constitutional rights to due process. By acknowledging the need for delays in traditional markets, the SEC has now given crypto exchanges an additional legal tool to challenge enforcement actions in court.
Legal Precedent Set for Crypto Cases
The SEC’s exemptive relief for equity markets sets a precedent that crypto platforms can use in their defense. The order recognizes that enforcement without clear rules creates confusion and disorder. This aligns with the legal arguments made by crypto exchanges, who have faced lawsuits for operating unregistered exchanges and dealing with digital assets under ambiguous rules.
For example, Kraken and Bittrex have used similar arguments in their defense, claiming that they did not have fair notice about how to apply the SEC’s rules to crypto activities. Judges in some cases have allowed these defenses to proceed, highlighting the lack of clear regulatory guidance. The SEC’s delay in equity market regulations strengthens this defense by showing that even traditional financial institutions need more time to comply when the rules are uncertain.
What Happens Next for Crypto Platforms?
With the SEC’s recent order providing relief to traditional exchanges, crypto exchanges are likely to use this development in their legal arguments. As the SEC has acknowledged that delayed compliance can be necessary when regulatory frameworks are still in flux, crypto lawyers will likely cite this reasoning in motions for stays, injunctions, and appeals. This strategy could buy more time for exchanges while the SEC works to finalize crypto-specific regulations.
Crypto exchanges are also expected to continue pushing for more clarity in how they can comply with U.S. securities laws. The SEC has yet to finalize rules governing the trading and custody of digital assets, leaving crypto platforms in a state of legal uncertainty. The recent delay in equity market regulations, however, offers a path for these platforms to argue for additional time and regulatory clarity, which could influence the outcome of current and future legal battles.
