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The Securities and Exchange Commission (SEC) issued an exemptive order on Oct. 31 that has nothing to do with Bitcoin or Ethereum but everything to do with how crypto exchanges will argue their cases over the next two years.
The order delays compliance deadlines for Regulation NMS, the rulebook governing US equity trading, until February and November 2026.
The announcement mentions a lapse in appropriations and the need to “facilitate orderly market functions” after a court denied a stay petition.
Chairman Paul Atkins framed the relief as procedural housekeeping for traditional markets struggling with new tick-size rules, access-fee caps, and transparency mandates during a partial government shutdown.
The order hands exchanges a precedent for the exact argument they’ve been making in courtrooms from San Francisco to Washington. When rules are in flux and regulators can’t provide clear guidance, enforcement should be paused until the agency establishes workable standards.
If the SEC grants breathing room to Nasdaq and the New York Stock Exchange while appropriations are frozen and judicial review drags on, the same logic applies to Coinbase, Kraken, and Binance.
These platforms fought enforcement actions while waiting for crypto-market-structure rules that still don’t exist.
The fair-notice defense finds new ammunition
Kraken, Bittrex, and Binance all invoked “fair notice” and due-process arguments when the SEC sued them for operating unregistered exchanges.
The theory is that if the agency hasn’t instructed platforms on how to comply with securities law in the crypto context, punishing them for noncompliance would violate constitutional due process.
Judge William Orrick let Kraken’s fair-notice defense proceed in January 2025, finding the exchange “plausibly alleged” a lack of notice about how the Howey test would apply to secondary-market token trades.
Bittrex made the same claim in June 2023, arguing that it “did not have fair notice” that listing tokens for spot trading could trigger exchange registration requirements.
Binance raised vague fair-notice principles in its defense, prompting the SEC to accuse the company of alleging “shifting positions” by the regulator.
The Third Circuit amplified the critique in January 2025 when it remanded Coinbase’s rulemaking petition back to the SEC.
Judge Stephanos Bibas wrote in concurrence:
“The SEC repeatedly sues crypto companies for not complying with the law, yet it will not tell them how to comply.”
That’s a due-process problem tied directly to regulatory opacity, and it’s the same problem today’s Reg NMS order acknowledges exists in traditional markets when compliance dates collide with unfinished rulemaking and appropriations lapses.
Why does exemptive relief matter structurally
Regulation NMS governs minimum pricing increments, exchange access fees, and the transparency of quotes. These mechanics shape how orders route and execute 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 normally lifted the stay and triggered compliance on Nov. 3.
Instead, the Commission issued temporary exemptive relief pushing deadlines into 2026 because exchanges can’t reasonably implement the changes during a funding lapse.
The procedural parallels to crypto are direct. The SEC has spent three years bringing enforcement cases against digital-asset platforms for operating unregistered exchanges and acting as unregistered broker-dealers. Still, it hasn’t finalized rules explaining what compliant crypto custody, trading, or token listing looks like.
Platforms argue they can’t comply with standards that don’t exist in written form. The agency responds that existing securities law is clear enough, except when it comes to equity market plumbing, where the same agency just granted multi-month relief because participants need time and regulatory clarity to implement new obligations.
As a result, crypto litigators may cite this order in every motion for stay, every preliminary injunction hearing, and every appeal brief going forward.
If the SEC believes orderly market functions require delayed compliance when rules are contested and resources are constrained, that principle applies with equal force to digital asset venues navigating enforcement while the Commission drafts crypto-specific frameworks.
The order doesn’t mention blockchain or tokens, but it codifies the logic crypto defendants have been arguing since 2023: enforcement without finalized rules creates chaos, and relief is the proper remedy.
What happens next
The relief runs until February 2026 for fee-determinability rules and November 2026 for tick sizes and access-fee caps.
Crypto cases will continue to litigate fair notice and due process in the meantime. Still, every defense motion might now cite the Commission’s own acknowledgment that delayed compliance serves orderly markets when rules are contested and resources are limited.
If the SEC eventually finalizes crypto-market-structure rules, whether through formal rulemaking or settlement frameworks in major cases, expect similar exemptive orders to be issued, giving platforms time to build compliant systems.
The procedural logic is identical: you can’t enforce obligations that participants can’t reasonably meet because the standards are unwritten or the agency is in the midst of rulemaking. Today’s order gives that argument the SEC’s own signature.
Crypto lawyers have just been given a roadmap for the next two years of litigation, and it leads straight through the same exemptive-relief process the Commission used to buy time for Nasdaq and the NYSE.
