Here’s what happened in crypto today

Today in crypto, Stacks co-founder Muneeb Ali has warned that most Bitcoin layer-2 projects will fade away within three years even as Bitcoin gains dominance, and the US Securities and Exchange Commission has moved to drop its appeal over the controversial crypto broker-dealer rule, which comes as the regulator is reportedly prioritizing pausing crypto enforcement cases with imminent deadlines while addressing regulatory gaps.Bitcoin L2 “honeymoon phase” is over, most projects will failMore than two-thirds of the existing Bitcoin layer-2 projects will cease to exist within three years as their initial excitement fades, said Muneeb Ali, co-founder of Stacks.“The honeymoon phase [for Bitcoin L2s] is a little bit over,” Ali said in an interview with Cointelegraph at Consensus 2025, while sharing updates on Stacks — a Bitcoin L2 originally launched as Blockstack in 2013. Stacks recently completed a major network upgrade, Nakamoto, which significantly improved user experience, Ali said, adding: “And the second big thing is that now Stacks is secured by 100% of Bitcoin hash.”As a result, users enjoy faster confirmations on the Bitcoin L2 while backed by the Bitcoin network’s inherent security. Speaking generally about the Bitcoin L2 ecosystem, Ali said that most projects have started to realize that “the market is super hard.”Additionally, Ali said he expects the market to shift toward Bitcoin as other popular layer-1 chains, such as Ethereum and Solana, decline. SEC pulls own appeal in case over crypto broker-dealer rulesThe US Securities and Exchange Commission has dropped its effort to undo a court ruling blocking a controversial broker-dealer rule that would have given the agency jurisdiction over decentralized crypto protocols.In a brief Feb. 19 filing to the Fifth Circut Appeals Court, the SEC said it moved “to voluntarily dismiss this appeal.”Last month, just days before former SEC Chair Gary Gensler was due to step down, the agency appealed a November ruling from a Texas federal court judge that had blocked the definition change. The SEC’s voluntary dismissal now ends the legal battle. “Complete and total victory today in our case against the SEC over the dealer rule,” Blockchain Association CEO Kristin Smith said in a Feb. 19 X post. “The crypto industry can breathe a sigh of relief.”SEC first pausing crypto lawsuits with imminent deadlines: ReportThe US Securities and Exchange Commission (SEC) has reportedly been prioritizing pausing cryptocurrency enforcement cases with imminent deadlines, which is partly why the securities regulator hasn’t yet paused its lawsuits against crypto firms Ripple and Kraken, according to Fox Business reporter Eleanor Terrett.The next court deadline for Ripple, the XRP Ledger blockchain network’s developer, isn’t until April 16. Meanwhile, cryptocurrency exchange Kraken’s next deadline is March 31, Terrett said in a Feb. 19 X post, citing several unnamed sources. Cointelegraph did not independently verify the information.Terrett added that cryptocurrency exchanges Coinbase and Binance do not face court deadlines until March 14 and April 14, respectively. “It’s possible SEC leadership is expecting @realDonaldTrump’s pick for chair Paul Atkins to be on his way to getting confirmed by that time,” Terrett said. “In the interim, the crypto task force, Congress and the Presidential Working Group on Digital Assets are presumably working to fill the regulatory gaps that led to these lawsuits being brought in the first place.”