SEC Chair Proposes DeFi Rule Overhaul to Protect Developers and Crypto Users

SEC Chair Atkins pushes for new DeFi rules to protect developers, users, and uphold innovation in U.S. blockchain systems

Fridah Kangai
June 11, 2025
3:28 am

Fridah Kangai

Fridah Kangai is a dedicated crypto journalist with a sharp eye for market trends, blockchain innovation, and digital asset movements. She specializes in breaking down complex topics into clear, engaging stories for both seasoned investors and curious newcomers. With a passion for decentralization and a pulse on the ever-evolving crypto space, Fridah delivers timely, accurate, and insightful coverage. Her work bridges the gap between technology and everyday understanding in the world of cryptocurrency.

SEC Chair wants formal rules for DeFi to shield developers from unclear securities laws
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Atkins defends self-custody as a digital form of American private property rights

SEC Chairman Paul S. Atkins has taken a firm stance on the future of decentralized finance, urging the creation of new rules that specifically address the unique structure of blockchain systems. At the meeting of the Crypto Task Force Roundtable in Washington, D.C., he mentioned that it’s necessary to change how the government regulates cryptocurrencies to protect both users and developers better.

According to Atkins, decentralized networks go against the typical legal rules because they do not depend on main intermediaries. Securities laws are made for businesses, making it challenging for them to regulate decentralized protocols.

Key points from Chairman Paul Atkins’ remarks today at “DeFi and the American Spirit,” SEC’s Crypto Task Force Roundtable on Decentralized Finance – a 🧵
— U.S. Securities and Exchange Commission (@SECGov) June 9, 2025

Besides highlighting the gap in the current laws, he mentioned how crucial it is to establish rules formally. To reassure people in DeFi, he believes it is not enough to leave legal decisions totally to staff members.

He pointed out that carrying out activities such as validating payments or mining does not always involve someone in activities related to securities. If regulations do not clearly state this, these participants can still be affected by unpredictable government actions.

Proposed Innovation Exemption to Support Crypto Development

Atkins put forward a proposal known as an “innovation exemption” to help lower the legal liability for blockchain developers. If a condition is met, this exemption would allow DeFi projects to take action without being punished right away.

He noted that the model would support growth by removing extra obstacles to trade and that this approach might make the United States a leader in the global blockchain industry.

In addition, Atkins connected the DeFi system’s design to age-old American principles, such as personal freedom and owning private property. He stressed that the ability for users to manage their crypto investments themselves is one of Ethereum’s main ideas.

Therefore, he encouraged people not to view software developers who make these tools as criminals. According to him, this type of treatment might reduce innovative ideas and decrease the freedom of money.

Moreover, he compared DeFi’s performance during market stress to centralized platforms, which have often failed during similar conditions. He made it clear that systems that are not centralized have shown to be strong, stable, and cost-effective.

With these statements, Atkins indicates that regulations will now seek to clarify laws, help developers, and encourage financial progress. The proposal is a big step forward in how the SEC deals with decentralized finance.

Also Read: VanEck, 21Shares, and Canary Urge SEC to Rethink Crypto ETF Approval Rules