The U.S. Securities and Exchange Commission (SEC) is preparing to roll out crypto-friendly regulatory reforms, including a proposed “innovation exemption” aimed at giving decentralized finance (DeFi) projects room to grow without being stifled by traditional securities laws.
The Goal: US SEC Be DeFi-Friendly
Speaking at the SEC’s “DeFi and the American Spirit” roundtable on Monday, Chairman Paul Atkins said the Commission is exploring ways to update its rules to better accommodate blockchain-based financial systems.
He also called for a regulatory framework that supports innovation while respecting constitutional rights and reducing unnecessary barriers for crypto developers.
“I have directed the staff to consider a conditional exemptive relief framework or ‘innovation exemption’ that would expeditiously allow registrants and non-registrants to bring on-chain products and services to market.”
Paul Atkins, Chairman, U.S. Securities and Exchange Commission
For Atkins, such an exemption could support U.S. President Donald Trump’s broader goal of making the country “the crypto capital of the planet.”
The Chairman further described the move as a clear departure from previous administrations, which he criticized for relying on aggressive enforcement actions that, in his view, discouraged Americans from participating in blockchain ecosystems.
The Clarification: DeFi Not Under Federal Laws
Atkins credited the SEC’s Division of Corporation Finance for clarifying that voluntary participation in proof-of-work or proof-of-stake networks as miners, validators, or staking service providers does not fall under federal securities laws, though he acknowledged this guidance still lacks the legal weight of formal regulation.
The Chairman also emphasized that many current securities laws were designed for a financial system reliant on issuers and intermediaries, not for decentralized, self-executing software systems.
Thus, the SEC is now considering how to modernize its approach to accommodate on-chain activity, including allowing self-custody of digital assets and supporting financial applications without traditional operators, he expressed.
“Many entrepreneurs are developing software applications that are designed to function without administration by any operator… These systems have proven to be resilient and capable of reducing economic frictions.”
Paul Atkins, Chairman, U.S. Securities and Exchange Commission
Atkins concluded by reaffirming the SEC’s commitment to modernizing its approach to decentralized technologies while protecting investors and upholding legal standards. He expressed eagerness to continue working with stakeholders on crafting a regulatory environment that fosters innovation.
The first Ethereum developer Eric Conner, praised Atkins’ recent remarks as a major breakthrough for crypto regulation in the U.S. and called the speech “a huge day” for Ethereum and DeFi.
In an X thread, Conner emphasized Atkins’ clear stance that mining, validating, and staking-as-a-service are not securities transactions. He noted that these would ease concerns about enforcement targeting infrastructure builders.
“If this becomes policy, the US becomes the crypto capital of the world. Ethereum gets regulatory clarity for staking, self-custody, and open-source infra. The tide is turning. Let’s build.”
Eric Conner, Ethereum Developer
The same sentiment was voiced by Cryptohuntz, the CEO of blockchain-based metaverse Alphaverse, saying that it is now “DeFi season” on Ethereum.
Meanwhile, the general counsel of Bitcoin-base Platform Plasma, Jacob Wittman, also expressed support for the SEC’s stance, emphasizing that consumers should have the right to transact freely without government overreach.
“We must encourage this administration to embrace rules that preserve and extend our right to financial privacy to on-chain transactions.”
Jacob Wittman, General Counsel, Plasma
What is DeFi?
Decentralized finance (DeFi) is a financial system that operates on blockchain technology, allowing peer-to-peer transactions without traditional intermediaries like banks.
It enables users to lend, borrow, trade, and earn interest on digital assets through decentralized applications.
PH SEC on Crypto
On May 30, 2025, the Philippine Securities and Exchange Commission (SEC) finalized rules requiring all crypto-related businesses in the country to register as Virtual Asset Service Providers (CASPs) and secure a license to operate.
To qualify, companies must be registered stock corporations with at least ₱100 million in paid-up capital (excluding crypto assets) and submit key documents such as a risk disclosure matrix and a detailed business plan.
Read BitPinas’ articles on the SEC CASP rules:
This article is published on BitPinas: US SEC Pushes DeFi-Friendly Crypto Rules, Backs Innovation Exemption
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