SEC Aims to Ease Regulations on DeFi After Years of Scrutiny

The Securities and Exchange Commission wants to ease restrictions governing decentralized finance (DeFi) platforms.

Speaking to DeFi experts during the “DeFi and the American Spirit” roundtable Monday (June 9), SEC Chairman Paul Atkins said industry developers should not be blamed for how their tools are used, according to a transcript of his remarks.

“Many entrepreneurs are developing software applications that are designed to function without administration by any operator,” Atkins said, per the transcript.

The SEC is considering changes to agency rules “to provide needed accommodation for issuers and intermediaries who seek to administer on-chain financial systems,” he said, according to the transcript.

“…I have directed the staff to consider a conditional exemptive relief framework or ‘innovation exemption’ that would expeditiously allow registrants and non-registrants to bring on-chain products and services to market,” Atkins said, per the transcript.

Although the technology underpinning private peer-to-peer transactions can “sound like science fiction,” Atkins said, “blockchain technology makes possible an entirely new class of software that can perform these functions without an intermediary,” according to the transcript.

“We should not automatically fear the future,” Atkins said, per the transcript.

Republicans are trying to ease the pressures on DeFi developers after years of scrutiny by government agencies.

“The [President Joe Biden] administration undermined innovation in self-custodial digital wallets and other on-chain technologies by asserting through regulatory actions that the developers of such software may be conducting brokerage activity,” Atkins said, according to the transcript. “Engineers should not be subject to the federal securities laws solely for publishing this type of software code.”

SEC Commissioner Hester Peirce, who heads the SEC Crypto Task Force, established this year, gave closing remarks during the roundtable.

“The SEC must not infringe on First Amendment rights by regulating someone who merely publishes code on the basis that others use that code to carry out activity that the SEC has traditionally regulated,” Peirce said, according to a transcript of her remarks.

However, she also noted that centralized entities can’t “avoid regulation by hiding behind a DeFi label,” per the transcript.

The roundtable took place amid a larger relaxation of U.S. policy toward the digital asset sector. Under the new President Donald Trump administration, the SEC has dropped or paused multiple legal actions against crypto companies, while also opposing certain unregistered staking protocols.

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