In a significant address on Monday, Paul Atkins, the new Chair of the US Securities and Exchange Commission (SEC), outlined his vision for decentralized finance (DeFi) and the broader cryptocurrency industry.
His remarks, delivered at a roundtable titled “DeFi and the American Spirit,” emphasized the alignment of DeFi with core American values such as economic liberty, innovation, and private property rights.
He noted that blockchain technology represents a groundbreaking innovation that challenges traditional notions of ownership and property rights. By enabling peer-to-peer transactions without intermediaries, blockchains facilitate a new form of digital property—crypto assets.
He welcomed recent clarifications from the SEC’s Division of Corporation Finance, affirming that participation in proof-of-work (PoW) or proof-of-stake (PoS) networks is not inherently subject to federal securities laws. However, Atkins stressed the need for formal regulations to solidify this understanding.
Atkins also expressed concern over the previous administration’s regulatory stance, which he felt undermined innovation in self-custodial solutions. He compared this to a hypothetical situation where a car manufacturer could be held liable for a traffic violation committed by a driver, emphasizing that software developers should not face similar repercussions for the use of their code by others.
Atkins acknowledged that existing securities regulations primarily focus on traditional issuers and intermediaries, which may not adequately address the unique features of on-chain systems. He has tasked SEC staff to explore new guidance and rulemaking that would facilitate compliant transactions with these innovative technologies.
Looking ahead, Atkins expressed enthusiasm for the potential of on-chain software to enhance capital efficiency, liquidity, and the creation of novel financial products.
Featured image from DALL-E, chart from TradingView.com
