Remarks At The Crypto Task Force Roundtable On Decentralized Finance, Paul S. Atkins, SEC Chairman, Washington D.C., June 9, 2025

Thank you and good afternoon.[1] It is a great pleasure to be with you today. Let me begin by thanking Commissioner Peirce and the Crypto Task Force for their organizing today’s event, and Commissioner Crenshaw and Commissioner Uyeda for their participation.  Of course, I very much thank the roundtable panelists and our moderator, Troy Parades, for their voluntary contribution of time and talent to our endeavor.

Today’s roundtable is titled “DeFi and the American Spirit.” This is an apt title because the American values of economic liberty, private property rights, and innovation are in the DNA of the DeFi, or Decentralized Finance, movement.

Blockchains, of course, are a very creative and potentially revolutionary innovation that have us rethinking evidence of ownership and transfer of intellectual and economic property rights.  They are shared databases that enable ownership of a type of digital property called crypto assets without reliance on an intermediary or central party. Instead, these peer-to-peer networks incorporate an economic mechanism to encourage participants to validate and maintain the database in accordance with the network’s rules. These are free market systems where users pay demand-based fees to network participants to have their transactions included within a so-called “block” of data with finite storage capacity.

The prior U.S. government administration discouraged Americans from participating in these market-based systems by asserting through lawsuits, speeches, regulation, and threatened regulatory action that participants and staking-as-a-service providers may be engaged in securities transactions. I am grateful to the Division of Corporation Finance staff for clarifying its view that voluntary participation in a proof-of-work or proof-of-stake network as a “miner,” “validator,” or “staking-as-a-service” provider is not within the scope of the federal securities laws.[2]  As happy as I am over that step, it is not a duly promulgated rule with the force of law, so we cannot stop there.  The Securities and Exchange Commission must adopt a regulation based on the authority that Congress has given us.

Another core feature of blockchain technology is the ability for individuals to have self-custody of crypto assets in a personal digital wallet. The right to have self-custody of one’s private property is a foundational American value that should not disappear when one logs onto the internet. I am in favor of affording greater flexibility to market participants to self-custody crypto assets, especially where intermediation imposes unnecessary transaction costs or restricts the ability to engage in staking and other on-chain activities.

The prior President’s administration undermined innovation in self-custodial digital wallets and other on-chain technologies by asserting through regulatory actions that the developers of such software may be conducting brokerage activity. Engineers should not be subject to the federal securities laws solely for publishing this type of software code. As one court put it, it would be irrational to hold the developer of a self-driving car liable – here, quoting from the court’s decision – “for a third-party’s use of the car to commit a traffic violation or to rob a bank. In those circumstances, one would not sue the car company for facilitating the wrongdoing; they would sue the individual who committed the wrong.”[3]

Many entrepreneurs are developing software applications that are designed to function without administration by any operator. The idea of self-executing software code that is accessible to everyone, but controlled by no one, and that enables private, peer-to-peer transactions may sound like science fiction. But, blockchain technology makes possible an entirely new class of software that can perform these functions without an intermediary. I do not believe that we should allow century-old regulatory frameworks to stifle innovation with technologies that could upend and most importantly improve and advance our current, traditional intermediated model.  We should not automatically fear the future.

These on-chain self-executing software systems have proven to be resilient in the face of crises. While centralized platforms waivered and failed under recent stresses, many on-chain systems continued to operate as designed pursuant to open-source code.[4]

Most current securities rules and regulations are premised upon the regulation of issuers and intermediaries, such as broker-dealers, advisers, exchanges, and clearing agencies. The drafters of these rules and regulations likely did not contemplate that self-executing software code might displace such issuers and intermediaries. I have asked the Commission staff to explore whether further guidance or rulemaking may be helpful for enabling registrants to transact with these software systems in compliance with applicable law.

I also am excited about the use of on-chain software systems by issuers and intermediaries to eliminate economic frictions, increase capital efficiency, enable new types of financial products, and enhance liquidity. Current securities regulations already contemplate the use of new technologies by issuers and intermediaries, but I have asked the staff to consider whether amendments to the Commission’s rules and regulations would be better suited to provide needed accommodation for issuers and intermediaries who seek to administer on-chain financial systems.

While the Commission and its staff work to propose fit-for-purpose rules of the road for on-chain financial markets, 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. An innovation exemption could help fulfill President Trump’s vision to make America the “crypto capital of the planet”[5] by encouraging developers, entrepreneurs, and other firms that are willing to comply with to certain conditions to innovate with on-chain technologies in the United States.

Thank you for your attention. I look forward to the discussions to follow.