SEC Commissioner Hester Peirce said writing blockchain and DeFi code should not automatically place developers under rules built for securities intermediaries. Speaking at Princeton University’s IC3 blockchain camp, she argued that publishing open-source software is, in many cases, an activity protected by the First Amendment.
Peirce draws a line between software publication and intermediary status
Peirce said the SEC rulebook is centered on intermediaries such as brokers, dealers, exchanges, clearing agencies, transfer agents, investment advisers, and investment companies. Those categories also appear in parts of the crypto market. Her question was whether rules built for centralized financial institutions should also be imposed on blockchain infrastructure itself.
Her position was clear. Many blockchain projects simply release open-source software, and that act alone should not trigger the obligations that federal securities laws impose on intermediaries. In her framing, writing code is not the same thing as carrying out unlawful conduct, and liability should attach to the people who actually engage in violations.
Open-source protection, disintermediation, and infrastructure use
Peirce’s argument can be broken into three parts. First, releasing open-source software is a form of expression that is generally protected under the First Amendment. Second, decentralized protocols can operate without traditional intermediaries, so responsibility for securities law violations should fall on the individuals committing the misconduct, not on every user of the software. Third, distributed networks support a wide range of functions beyond securities activity, which means the infrastructure itself should not be forced into a single regulatory category.
That approach would require regulators to identify who actually acts as an intermediary before assigning the legal obligations tied to that role. It rejects a broad reading that would collapse protocols, interfaces, networks, and users into one bucket.
Her remarks align with recent SEC signals
Peirce’s speech also fits with recent messaging from the SEC. According to the source material, SEC Chair Paul Atkins said in a May speech that the agency’s earlier approach had relied on “regulation through enforcement.” The SEC’s crypto task force has been reviewing how existing securities laws apply to digital assets and decentralized systems.
Weeks earlier, SEC staff also issued guidance on broker registration requirements, noting that some front-end websites and software interfaces that only provide access to decentralized protocols may not qualify as brokers in the traditional sense. That does not amount to a blanket exemption, but it does point to a more segmented approach.
The dispute turns on how regulators separate software from conduct
Peirce’s comments return the debate to a basic question: where is the line between writing code, deploying a protocol, offering access tools, and actually brokering, custodying, promoting, or executing securities transactions. Her answer is that technology should not be treated as a securities intermediary merely because it can be used in securities-related activity.
The SEC’s draft strategic plan through 2030 also says blockchain and crypto asset technologies could reshape US financial infrastructure. The issue now is not whether regulation exists, but how finely it is applied. From Peirce’s public remarks, DeFi code and intermediary status cannot be treated as the same thing.