Blockchain Legal Resource

In prepared remarks delivered May 8, 2026, US Securities and Exchange Commission Chairman Paul Atkins highlighted future rulemaking priorities for onchain trading systems. The Chairman continued to reference “future proofing” regulations, which is his shorthand for engaging in rulemaking that cannot easily be undone by a subsequent administration.

According to Chairman Atkins:

Our existing framework identifies regulated market functions through distinct categories: namely, brokers or dealers, exchanges, clearing agencies, and transfer agents.

But software applications today do not always organize themselves neatly along these categorical lines. A single protocol can execute a trade, manage collateral, route liquidity, execute trading strategies through vault structures, and settle the transaction—all within a unified, automated system, often within seconds.

Now, allow me to outline areas in which I think the Commission needs to provide greater clarity as to how those principles apply in the context of onchain markets.

First, market participants should have a clear sense of how onchain trading systems can operate within the regulatory perimeter. To that end, while I anticipate that the Commission will consider a limited innovation pathway in the near future, I also think we should consider what a future-proofed framework may look like, which would take the form of notice and comment rulemaking and would address the “exchange” definition as applied to onchain trading systems.

Second, we should further consider the application of the broker and dealer definitions and the associated regulatory framework to these activities, including by addressing some of the issues raised in a recent staff statement on software interfaces. This policy initiative may involve notice and comment exemptive rulemaking as well.

Third, I think we should ultimately consider rulemaking to address the definition of “clearing agency” with respect to persons facilitating onchain clearing and settlement, specifically to confirm which general-purpose activities fall outside the scope of the definition. When settlement is near-instantaneous and counterparty risk is managed algorithmically, the traditional clearing agency model requires fresh analysis.

Lastly, I think we should consider ways to provide clarity surrounding what are commonly referred to as “crypto vaults,” particularly regarding Securities Act and Advisers Act touch-points. Crypto vaults are onchain software applications that are often designed to allow users to earn yield passively through the deployment of their assets into yield-generating opportunities onchain.

As the Commission considers these policy initiatives, 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. We should clarify how the Commission views the spectrum of models that may implicate our statutes through notice and comment rulemaking, using our exemptive authorities where necessary and prudent, all with full participation from innovators, investors, and the public alike.

In any event, continued engagement with investors, market participants, and our fellow regulators is vital. These issues do not always fall neatly within a single jurisdiction. Therefore, regulatory coordination is not a nicety. It is a necessity, if we are to avoid a patchwork that creates confusion and leaves investors unprotected in the gaps.

The SEC will keep moving forward in its work to accommodate markets moving onchain. But as we do, I continue to echo my call for 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.