U.S. SEC Mulls New Securities Rules for On-chain Financial Markets

The U.S. Securities and Exchange Commission (SEC) Chair, Paul Atkins, has revealed areas that the Commission is likely to consider for new rulemaking on on-chain markets. This comes as the crypto market awaits regulatory clarity through the CLARITY Act, with a markup of the crypto bill likely next week.

SEC Weighs New Rules For On-chain Markets

In remarks at an event in Washington, the SEC chair outlined areas where he believes the Commission needs to provide greater clarity regarding rules that apply to on-chain markets. Firstly, he stated that he anticipates the Commission will consider a limited innovation pathway in the near future for on-chain trading systems.

Furthermore, the SEC chair opined that they should consider what a future-proofed framework might look like, one that addresses the “exchange” definition as it relates to these systems. Secondly, Atkins stated that they should further consider how the broker-dealer definitions and the associated regulatory framework apply to these activities.

He added that they could do this by addressing some of the issues raised in a recent staff statement on software interfaces. Atkins added that this policy may also involve notice-and-comment exemptive rulemaking.

As CoinGape reported, the staff statement had provided a pathway for DeFi platforms to operate without broker-dealer registration. Specifically, it relates to Covered User Interfaces, which market participants typically use to carry out transactions involving crypto asset securities.

On Clearing Agency And Crypto Vaults

Atkins stated that they should ultimately consider rulemaking to define “clearing agency” for firms facilitating on-chain clearing and settlement, with the aim of clarifying which general-purpose activities fall outside its scope. The SEC chair also said they should consider ways to provide clarity on crypto vaults, especially regarding the Securities Act and Advisers Act touchpoints.

He noted that these crypto vaults enable users to earn crypto passive income by deploying their assets into yield-generating opportunities on-chain. Atkins reminded that today’s on-chain market structures are often hybrid, combining traditional and decentralized finance, which the Commission will bear in mind as it considers these policy initiatives.

The SEC chair assured that they will continue their work to accommodate markets moving on-chain. At the same time, he urged Congress to send the CLARITY Act to President Trump’s desk. “Because, while I intend to future-proof our efforts through notice and comment rulemaking, there is no more powerful way to future-proof than enshrining sound statutory language in law,” he added.