Key points from Chairman Paul Atkins’ remarks today at “DeFi and the American Spirit,” SEC’s Crypto Task Force Roundtable on Decentralized Finance – a 🧵

The American values of economic liberty, private property rights, and innovation are in the DNA of the DeFi, or Decentralized Finance, movement.

The prior administration discouraged Americans from participating in blockchains 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.

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 SEC must adopt a regulation based on the authority that Congress has given us.

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.

Many entrepreneurs are developing software applications that are designed to function without administration by any operator. These on-chain self-executing software systems have proven to be resilient in the face of crises.

Most current securities rules and regulations are premised upon the regulation of issuers and intermediaries. 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.

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.

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” by encouraging developers, entrepreneurs, and other firms willing to comply with certain conditions to innovate with on-chain technologies in the United States.

Full remarks: