SEC Chair Paul Atkins said Friday the agency is actively considering formal rulemaking to govern onchain trading systems, crypto vaults, and blockchain-based settlement infrastructure, a direct signal that Washington’s approach to digital asset regulation is moving from courtrooms to rulesets. Atkins made the remarks in a prepared speech at the AI+ Expo in Washington, linking the rise of AI-powered financial applications with accelerating demand for blockchain market infrastructure.
The chair argued that existing securities regulations were built around traditional intermediaries including brokers, exchanges, and clearinghouses, and that those frameworks do not map cleanly onto blockchain protocols that consolidate multiple market functions into a single piece of software.
The statement marks one of the clearest public commitments yet from Atkins toward reshaping securities law for decentralized finance rather than forcing it into legacy compliance structures.
One Protocol, Many Functions
Atkins described a structural challenge at the core of crypto regulation: a single protocol can simultaneously execute a trade, manage collateral, route liquidity, run automated trading strategies through vault structures, and settle the transaction.
That functional overlap creates genuine legal ambiguity under rules written decades before smart contracts existed.
“We should remember that onchain market structures today are often hybrid in nature, combining elements of what are often referred to as traditional and decentralized finance,” Atkins said.
He called on the Commission to clarify its view across the full spectrum of these hybrid models through notice-and-comment rulemaking, with exemptive authorities applied where the agency finds them appropriate.
The framing was deliberate. Rather than drawing a hard line between traditional finance and DeFi, Atkins positioned onchain markets as a continuum, one that requires purpose-built regulatory guidance rather than enforcement actions used as de facto policy.
A Formal Shift From Enforcement to Rulemaking
The speech reinforces a broader regulatory pivot underway at the SEC since former Chair Gary Gensler’s departure. Gensler had pursued a largely enforcement-led strategy, filing lawsuits against centralized exchanges he argued were acting as unregistered brokers, dealers, and clearinghouses simultaneously.
Atkins is now proposing to address the same structural questions through the rulemaking process instead.
Under the current administration, the SEC has already issued several crypto-related staff guidance documents, no-action relief letters, and public statements aimed at reducing legal uncertainty for digital asset firms.
Friday’s speech suggests that effort is now moving toward binding regulatory text rather than informal guidance alone.
For crypto markets, the practical implications are significant. Onchain trading venues, tokenized asset platforms, and DeFi protocols operating in the United States have faced prolonged uncertainty over whether their activities trigger securities registration requirements.
A formal rulemaking process would give industry participants a structured opportunity to comment before any new obligations take effect, a meaningful procedural shift from receiving a complaint as the first notice of regulatory concern.
Atkins did not announce a specific timeline for any rulemaking proposal or indicate which agency divisions would lead the effort, leaving the scope of the initiative still to be defined in the months ahead.
Not Financial Advice: This article is for informational purposes only. Crypto investments are highly volatile. Always do your own research.
