SEC chairman Paul Atkins announces the easing of strict rules for crypto startups

In a move that could redefine decentralized finance (DeFi), the U.S. Securities and Exchange Commission (SEC) is revisiting its regulatory playbook. Under the leadership of SEC chairman Paul Atkins, the agency is weighing conditional exemptions and updated guidance to foster innovation while maintaining investor safeguards.

SEC chairman Paul Atkins pushes for balanced DeFi rules

During a recent Crypto Task Force Roundtable, SEC chairman Paul Atkins emphasized the need to align DeFi regulation with “American values of innovation and economic empowerment.” His remarks signal a departure from the SEC’s historically rigid stance, acknowledging that past enforcement actions may have stifled growth.

“The prior administration discouraged participation by treating staking and DeFi protocols as securities transactions by default,” said SEC chairman Paul Atkins. “We’re now evaluating targeted relief to let compliant projects thrive.”

The proposed changes include exemptive relief for qualifying startups and clearer rules for self-custody solutions, a lifeline for developers navigating regulatory gray areas.

Mining and staking get long-awaited clarity

The SEC’s latest guidance, Statement on Certain Proof-of-Work Mining Activities and Statement on Certain Protocol Staking Activities, draws a line between regulated securities and decentralized consensus mechanisms. SEC chairman Paul Atkins clarified that not all mining or staking falls under the agency’s purview, offering relief to projects built on community-driven models.

Legal experts say the shift reflects lessons from high-profile cases like Risley v. Universal Navigation Inc., where courts ruled that protocol creators shouldn’t bear liability for third-party misuse—a precedent SEC chairman Paul Atkins cited as foundational for future policy.

Courts and regulators shape DeFi’s future

As litigation shapes the boundaries of decentralized systems, the SEC is adopting a more nuanced approach. SEC chairman Paul Atkins pointed to the self-driving car analogy from recent rulings: “You wouldn’t sue the automaker if a thief used the car for a bank robbery. Similarly, we must distinguish between tool creators and bad actors.”

The agency’s focus now is on “predictable oversight”—a framework that protects investors without strangling innovation. With DeFi’s market influence growing, SEC chairman Paul Atkins’s strategy could determine whether the U.S. leads or lags in the global crypto economy.

The path ahead: Flexibility with accountability

While the SEC’s softer stance has drawn praise from developers, SEC chairman Paul Atkins stressed that investor protections remain non-negotiable. The agency will continue monitoring DeFi for fraud and market manipulation, even as it loosens certain restrictions.

“This isn’t a free pass—it’s a smarter regulatory toolkit,” he said. For an industry hungry for clarity, SEC chairman Paul Atkins’s pivot may finally provide the runway DeFi needs to take off.