TLDR
- SEC Chair Paul Atkins supported the right to crypto custody during the SEC crypto roundtable.
- He stated that individuals should be allowed to self-custody their digital assets without unnecessary intermediation.
- Atkins directed SEC staff to review current rules for DeFi platforms and suggest necessary amendments.
- He said existing securities regulations already consider the use of new technologies, but may need updates.
- The roundtable focused on DeFi activities, token governance, and the future of smart contract regulation.
The SEC hosted a crypto roundtable focused on blockchain regulation and decentralized finance. SEC Chair Paul Atkins emphasized support for crypto custody rights. He also directed staff to review existing rules affecting DeFi platforms and on-chain financial systems.
Atkins reinforced the idea that users should maintain control of their digital assets without forced intermediation. He raised concerns about high transaction costs and restrictions caused by unnecessary intermediaries in blockchain ecosystems. Therefore, he stressed the need to enhance flexibility for crypto users to engage in staking and on-chain activities.
He acknowledged that digital self-custody aligns with core property rights principles. The roundtable highlighted issues around token governance and smart contracts. Participants also explored whether current regulations adequately accommodate decentralized protocols and emerging blockchain use cases.
Crypto Custody Rights Gain Backing from SEC Leadership
Paul Atkins emphasized the importance of crypto custody as a fundamental principle. He confirmed that self-custody remains consistent with the broader vision of asset ownership. This perspective supports individual control over private keys in digital ecosystems.
He criticized past approaches that limited on-chain innovations and self-custody options. Atkins believes prior SEC leadership misaligned enforcement strategies with evolving technology. He intends to reverse that trend by aligning policy with blockchain-native principles.
The SEC roundtable demonstrated that Atkins plans to protect individual rights in digital environments. He aims to ensure current regulations accommodate crypto custody solutions. His leadership may mark a shift toward reduced regulatory friction for blockchain developers and users.
Regulatory Adjustments Considered for DeFi and On-Chain Systems
Atkins directed SEC staff to review whether existing rules meet the needs of on-chain financial systems. He also suggested regulatory amendments to better accommodate these platforms, which could enable smoother compliance for decentralized protocol operators.
He acknowledged that the current framework allows for innovation but may still require targeted improvements. Therefore, his team is exploring whether conditional exemptions can support DeFi platforms. These measures could allow faster market entry for compliant blockchain services.
Conditional Exemptions and the Role of Legislation
Atkins revealed that the SEC may implement a conditional exemptive relief system. This would allow compliant DeFi platforms to operate under specific conditions. It could offer a transitional path for non-registrants seeking to launch on-chain products.
He also acknowledged that current rules already address new technologies. However, further SEC guidance may clarify how to apply these rules to blockchain systems. These updates may promote regulatory certainty across DeFi activities.
