Securities and Exchange Commission Chair Paul Atkins fired a clear signal at the crypto industry on Friday: the rules are changing, and blockchain-native financial systems are in the crosshairs — in a good way.
On Friday at the AI+ Expo in Washington, Atkins confirmed the SEC is actively evaluating formal rulemaking around onchain trading systems, blockchain settlement infrastructure, AI-driven financial applications, and crypto vault products. Nothing this concrete has come from the regulator since Trump installed Atkins as chair.
Why Existing Rules Don’t Fit
He laid out the core problem plainly. Securities laws were written for traditional intermediaries: brokers execute trades, exchanges match buyers and sellers, clearinghouses handle settlement. Each function sits in a separate institution, regulated separately.
Blockchain protocols collapse all of that into one piece of software.
“A single protocol can execute a trade, manage collateral, route liquidity, execute trading strategies through vault structures and settle the transaction,” Atkins said.
Nobody has had a clear answer to whether a DeFi protocol qualifies as a broker, exchange, clearinghouse, or something the law never imagined. Years of enforcement-heavy regulation grew from that ambiguity, and Atkins wants to replace it with real rules.
The Shift Away from Gensler’s Approach
Gary Gensler ran the SEC on a lawsuit-first playbook, arguing most digital assets were unregistered securities and existing rules applied. He collected billions in penalties. He didn’t produce legal certainty.
Atkins is betting on the opposite: exemptive authority and formal notice-and-comment rulemaking, built around how blockchain systems work.
“We should clarify how the Commission views the spectrum of models that may implicate our statutes through notice and comment rulemaking, using our exemptive authorities where necessary and prudent,” he said.
He’s already pushed staff guidance, no-action reliefs, and public statements out the door since taking over. Friday’s speech makes clear formal rulemaking is next.
What Could Change
Four specific areas are in scope:
Onchain exchanges: DeFi protocols facilitating trading could be formally categorized — and exempted from broker-dealer requirements if they meet blockchain-specific standards.
Clearing and settlement: Blockchain finality works differently from traditional clearinghouses. A dedicated regulatory lane is being considered.
Crypto vaults: Yield-bearing products that blend custodial, lending, and trading functions are a key focus. They’ve grown fast and sit in a genuine legal gray zone.
AI-driven finance: Atkins tied AI-powered financial applications explicitly to the blockchain rulemaking initiative. He sees both as part of the same evolving challenge.
Industry Reaction
Major exchanges welcomed the announcement. Coinbase, Kraken, and Gemini have each lobbied for a federal framework to replace the patchwork of enforcement actions and state-by-state rules.
“Millions of Americans are participating in digital asset markets without the federal regulatory protections they deserve,” they said in a joint statement this week, connected to the parallel Senate digital assets bill debate.
For institutional investors, formal rulemaking means legal certainty. Without it, serious capital stays on the sidelines.
Timeline Still Uncertain
No specific dates came with the announcement. Formal SEC rulemaking runs slow: notice-and-comment cycles, industry responses, internal deliberation, and court challenges can eat 12-24 months.
But the direction is set. Enforcement-first is over. Framework-first is starting — and the crypto industry is watching closely to see what gets built.
FAQ
Q: What did SEC Chair Atkins actually announce?
A: Atkins said the SEC is considering formal rulemaking to address how securities laws apply to onchain trading systems, blockchain settlement, AI-driven finance, and crypto vault products. No specific rules were proposed yet.
Q: How is this different from the previous SEC approach?
A: Under former Chair Gary Gensler, the SEC pursued enforcement actions against crypto firms using existing rules. Atkins is signaling a shift toward purpose-built rules developed through formal notice-and-comment rulemaking.
Q: When would new rules take effect?
A: No timeline was given. Formal SEC rulemaking typically takes 12-24 months from initial proposal to final implementation.
