The U.S. Securities and Exchange Commission is working on policy to exempt decentralized finance (DeFi) platforms from regulatory barriers, said Chairman Paul Atkins.
Software developers building DeFi tools have no business being blamed for how they’re used, Atkins and other SEC Republicans contended at the final of five crypto roundtables held since the leadership turnover under President Donald Trump.
The chairman told a roundtable of DeFi experts on Monday that he’s directed the SEC staff to look into changes to agency rules “to provide needed accommodation for issuers and intermediaries to seek to administer on-chain financial systems.” Atkins called that potential exemptive relief “an innovation exemption” allowing SEC jurisdictions to bring on-chain products and services to market “expeditiously.”
“Many entrepreneurs are developing software applications that are designed to function without administration by any operator,” Atkins said during the event. While he noted the technology enabling private peer-to-peer transactions can “sound like science fiction,” he emphasized “blockchain technology makes possible an entirely new class of software that can perform these functions without an intermediary.”
“We should not automatically fear the future,” Atkins stated.
DeFi is a subsection of the broader cryptocurrency industry that aims to recreate financial tools and products using code that replaces traditional intermediaries such as banks and brokerages.
The Republican members of the commission — currently outnumbering the Democrat 3-1 — have been eager to advance crypto-friendly policy. DeFi is often overlooked in policy discussions that focus more on regulating the higher-volume sectors of crypto exchanges, brokers, and custodial services. Though DeFi developers have faced years of skepticism from U.S. government agencies, Republicans in power now aim to ease those pressures.
“The SEC must not infringe on First Amendment rights by regulating someone who merely published code based on how others use that code to carry out activities traditionally regulated by the SEC,” said Commissioner Hester Peirce, who has led the SEC Crypto Task Force established this year. However, she also pointed out that “centralized entities can’t avoid regulation simply by rolling out the decentralized label.”
Erik Voorhees, the founder of decentralized exchange ShapeShift, noted that when he received his first SEC subpoena 12 years ago, he never anticipated being invited to speak at the agency years later.
“I appreciate the change of tone and stance from the commission,” he said. “I think that’s absolutely a positive for America.”
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