SEC Chair Atkins pushes new framework for onchain markets

The U.S. Securities and Exchange Commission may be preparing for its biggest crypto policy shift in years after Chairman Paul Atkins called for formal rulemaking aimed at decentralized finance platforms and blockchain-based trading systems.

Speaking Friday at the Special Competitive Studies Project AI+ Expo in Washington, Atkins said existing securities rules were written for traditional financial intermediaries and no longer cleanly apply to modern on-chain systems that can execute trading, settlement, liquidity routing, and collateral management through software.

“Software applications today do not always organize themselves neatly along these categorical lines,” Atkins said in remarks published by the SEC.

Atkins said the SEC should revisit how legal definitions such as “exchange,” “broker,” and “clearing agency” apply to blockchain protocols through a formal notice-and-comment process.

The remarks are being viewed across the crypto industry as a meaningful break from the SEC’s approach under former Chair Gary Gensler, whose tenure was defined largely by enforcement actions against token issuers, exchanges, and DeFi projects.

Rather than arguing that existing rules already cover nearly every crypto activity, Atkins appears to be signaling that some parts of decentralized finance may require new regulatory treatment altogether.

He also identified crypto vaults, on-chain applications that allow users to earn passive yield, as another area where the agency intends to provide more clarity.

Atkins said the commission should use exemptive authority “where necessary and prudent” while opening the process to participation from “innovators, investors, and the public alike.”

Why global markets are paying attention

Even though the proposals are coming from Washington, their impact could extend far beyond the United States.

Many of the largest crypto exchanges and decentralized protocols rely heavily on U.S. dollar liquidity, American venture funding, institutional counterparties, or access to U.S.-linked banking infrastructure. As a result, SEC guidance often becomes an informal global standard, even for projects headquartered overseas.

That pattern was already visible earlier this year when the SEC and Commodity Futures Trading Commission introduced a joint framework categorizing digital assets into groups such as digital commodities, stablecoins, digital collectibles, and digital securities.

Reuters reported the framework followed years of lobbying from the crypto sector for clearer rules.

Regulators in Europe, Singapore, and the United Arab Emirates have also been moving toward more structured crypto oversight, though their approaches differ. The European Union’s MiCA framework separates digital assets into multiple regulatory categories, while Singapore and Dubai have created licensing systems specifically for crypto trading, custody, and token issuance.

Lawyers and compliance advisers say the SEC’s eventual definitions for on-chain trading systems could influence how global platforms structure products, user access, and compliance operations moving forward.

That matters particularly for decentralized finance protocols, many of which process billions of dollars in trading activity every week while serving users across multiple jurisdictions simultaneously.

Atkins compared the current moment to the rise of electronic trading systems in the late 1990s. He pointed to Regulation ATS, which allowed alternative electronic trading venues to operate without registering as full national securities exchanges.

“The SEC will keep moving forward in its work to accommodate markets moving onchain,” Atkins said, according to Bankless.

Industry reaction turns positive

The response from crypto industry groups was largely supportive, reflecting growing optimism that the SEC may be moving toward a more collaborative relationship with digital asset firms.

The DeFi Education Fund described Atkins’ comments as “powerful” in a post on X.

The Hyperliquid Policy Center said it welcomed a chairman “willing to map these systems to existing legal frameworks on their own terms, rather than force them into legacy categories built for legacy architecture.”

The comments also follow a recent SEC staff statement indicating that DeFi wallet interfaces generally would not be treated as brokers, a move widely seen as reducing regulatory pressure on developers building decentralized applications and trading interfaces.

Congress, meanwhile, remains divided over broader crypto legislation, including the proposed CLARITY Act. That legislative gridlock could leave the SEC’s own rulemaking process as the fastest path toward a workable regulatory framework for decentralized markets.

The agency has not announced a timeline for releasing proposed rules. However, Atkins previously told Reuters that the SEC planned to release a crypto safe harbor proposal for public comment “in the coming weeks” as of March 2026.

There’s a middle ground between leaving money in the bank and rolling the dice in crypto. Start with this free video on decentralized finance.