SEC Chair Paul Atkins detailed a broad review of rule changes tied to blockchain-based financial markets during a Thursday event. He outlined potential rulemaking around onchain exchanges, brokers, clearing agencies, and crypto vaults, stressing that existing securities rules do not fully capture how blockchain protocols operate today.
Exchange Definition Under Scrutiny for Onchain Systems
Atkins noted that some onchain systems now handle trading, collateral management, liquidity routing, and settlement simultaneously. The SEC is considering revising the legal definition of an exchange and may open notice-and-comment procedures for onchain trading platforms. "Current rules weren't designed for these automated hybrid structures," he said.
Broker-Dealer Rules and Software Interfaces
The agency is also reviewing how broker and dealer rules apply to software interfaces and blockchain-based activity. Atkins mentioned that exemptive rulemaking could be part of the process. He added that regulators must provide clearer guidance as onchain financial systems continue to expand.
Near-Instant Settlement Challenges Clearing Agency Model
Atkins questioned whether the traditional clearing agency model fits markets using near-instant settlement technology. Algorithmic systems now manage counterparty risk directly through automated blockchain processes, prompting the SEC to review which onchain activities should fall outside existing clearing agency definitions.
Crypto Vaults and Hybrid Finance Under Review
Regarding crypto vaults that generate yield through blockchain strategies, the SEC is studying how those products fit under the Securities Act and the Investment Advisers Act. Atkins said the agency wants clarity on how hybrid models operate between decentralized and traditional finance.
Interagency Coordination and the CLARITY Act
Atkins stressed coordination among regulators and urged Congress to advance the CLARITY Act. He argued that statutory language provides stronger long-term certainty than regulatory guidance alone. Separately, he said firms remain responsible for outcomes produced by AI tools in investment and market operations.