SEC Chair Paul Atkins Wants to Let DeFi Thrive With Fewer Rules

The U.S. Securities and Exchange Commission may soon ease the regulatory burden on decentralized finance platforms as Chairman Paul Atkins outlines a potential "innovation exemption" aimed at protecting developers and enabling new blockchain-based systems to thrive.

In the final session of a five-part crypto roundtable series, SEC Chairman Paul Atkins signaled a notable shift in regulatory tone, especially regarding decentralized finance (DeFi).

JUST IN: SEC Chair Paul Atkins announces he's in favor of Bitcoin & crypto self custody. 👀

"The right to have self custody of ones private property is a foundational American value." 🇺🇸 pic.twitter.com/p9Ne97baxK

— Bitcoin Magazine (@BitcoinMagazine) June 9, 2025

Code, Not Conduct

Speaking to industry experts and developers on Monday, Atkins said he has directed SEC staff to explore exemptions or guidance that would let DeFi platforms operate with fewer barriers.

The proposal seeks to support on-chain financial systems and reflect the technological shift toward decentralized models.

He emphasized that this principle should not vanish online, especially in a financial ecosystem increasingly powered by decentralized technologies. The comments mark a stark contrast with previous SEC leadership, which leaned heavily on enforcement and broad interpretations of securities laws.

Read more: Circle Shares Extend Rally, Gain 15% on Monday to Hit $134 After Strong IPO

At the roundtable titled "DeFi and the American Spirit," Atkins and other Republican commissioners argued that software developers should not be held liable for how decentralized tools are used.

He rejected the notion that writing code constitutes a regulated activity if that code enables financial transactions. Commissioner Hester Peirce echoed this view, warning against infringing on First Amendment rights.

DeFi and the Regulatory Crossroads

DeFi refers to the class of blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Read this Term-based tools that replicate traditional financial services, such as lending, trading, and insurance, without relying on centralized intermediaries. These platforms have long existed in a gray area of U.S. financial regulation, with developers often facing investigations or uncertainty about their legal status.

Atkins called for reevaluating legacy frameworks and asked staff to assess whether new guidance or rulemaking would help entities interact with DeFi tools while remaining compliant.

You may also like: UK Hires First Crypto Specialist for Insolvencies as Recovery Cases Rise

This change in direction coincides with a broader shift at the SEC following the departure of former Chair Gary Gensler and the arrival of the Trump-era appointees. Under the new leadership, the SEC has rolled back several enforcement actions and launched a Crypto Task Force focused on industry engagement.

The roundtables, held throughout the past few months, covered custody, trading, tokenization Tokenization Tokenization represents the process of substituting a sensitive data element with a non-sensitive equivalent, i.e. token, which bears no extrinsic or exploitable meaning or value. In essence, the rights to the ownership of an asset are converted into a digital token. Tokenization can be used to own an entire unit of an asset. For example, one token that represents the ownership of a piece of real estate or to split ownership of a single unity of an asset such as 200,000 tokens, each one represen Tokenization represents the process of substituting a sensitive data element with a non-sensitive equivalent, i.e. token, which bears no extrinsic or exploitable meaning or value. In essence, the rights to the ownership of an asset are converted into a digital token. Tokenization can be used to own an entire unit of an asset. For example, one token that represents the ownership of a piece of real estate or to split ownership of a single unity of an asset such as 200,000 tokens, each one represen Read this Term, and securities definitions. The latest discussion on DeFi capped the series, reinforcing the agency’s pivot from adversarial enforcement to rulemaking tailored to emerging technologies.