Positive Industry Reaction to SEC’s DeFi Roundtable
The industry response to the Securities and Exchange Commission’s (SEC) recent DeFi roundtable has been predominantly positive. The SEC appears to be embracing decentralized finance (DeFi), as evident from the discussions during the roundtable held on June 9. Titled “DeFi and the American Spirit,” the event featured notable insights from the new SEC Chairman, Paul Atkins.
Chairman Atkins Emphasizes Self-Custody
Atkins highlighted the importance of retaining control over personal assets, stating, “The right to have self-custody of one’s private property is a foundational American value that should not disappear when one logs onto the internet.” He also indicated that while the SEC is in the process of developing comprehensive regulations, he has instructed the staff to explore a conditional exemption framework, referred to as the “innovation exemption,” which could facilitate the introduction of on-chain products and services to the market more rapidly.
DeFi Under Scrutiny, Not Dismissal
The comments made during the SEC roundtable resonated within the industry. Martin de Rijke, Head of Growth at Maple Finance, remarked to The Defiant that the roundtable signified a significant shift in perspective: “DeFi is no longer being dismissed; it’s being dissected.” He noted that Commissioner Atkins’ remarks reflect a move towards understanding the mechanics of decentralized systems, particularly concerning risk, control, and governance. This marks a departure from previous discussions that primarily focused on regulatory breaches associated with DeFi.
A Shift in Regulatory Approach
The SEC is currently undertaking a comprehensive review of its cryptocurrency regulations, with Atkins advocating for a more open and cooperative regulatory environment, moving away from an enforcement-centric approach.
Positive Impact of Regulatory Clarity
Chuck Zhang, CFO of the PayFi protocol PolyFlow, expressed optimism regarding the potential positive influence of a friendly regulatory environment on DeFi markets. He stated, “Clearer and collaborative regulatory guidelines… may spur builders to comply without stifling innovation, and bolster investor confidence while dissuading capital liquidity from moving offshore.”
Highlighting the Urgency for Clarity
Joe Sticco, co-founder and CEO of Cryptex Finance, emphasized the importance of keeping innovation within the United States. He praised Commissioner Atkins for his clear and decisive remarks, noting that the acknowledgment of overregulation pushing innovation away was both refreshing and urgent. Sticco also appreciated Atkins’ portrayal of regulators as guides rather than gatekeepers, suggesting a readiness to harmonize oversight with innovation rather than oppose it. He sensed a “tone of cautious optimism” regarding American leadership in DeFi, as echoed by various participants from both industry and policy backgrounds.
Industry’s Shift Towards U.S. Operations
Joris Delanoue, co-CEO and co-founder of Fairmint, shared his perspective during a Zoom call, noting a shifting trend. “In the past, people were going offshore; they were trying to avoid any enforcement,” Delanoue observed. “Now everyone is considering bringing things back to the U.S. We’ve been asking for clarity for years, and finally, the industry is getting it in the form of a playbook.”
DeFi’s Place in Regulatory Discussions
Charles St. Louis, CEO and founder of DELV, described the roundtable as “a breath of fresh air” in an email. He remarked on the positive shift in sentiment, stating, “The tide is finally turning, and DeFi is getting its long-overdue seat at the table.” St. Louis noted that Chairman Atkins provided a clear pro-crypto message, unequivocally affirming that self-custody is a core American value and that DeFi deserves a pathway forward under sensible, modern regulations.
Clarifications on Regulatory Status
St. Louis also pointed out that Atkins clarified that mining, validating, and staking-as-a-service are not classified as securities transactions. Additionally, he defended open-source developers, asserting that the act of publishing staking code or wallet software does not constitute brokerage activity. He referred to the proposed innovation exemption as a potential “paradigm shifter,” as it would offer legal clarity and create space for DeFi innovators to operate while a long-term regulatory framework is being established.
Market Response to SEC’s Stance
He noted that the market reacted swiftly to this news, with DeFi tokens such as AAVE, UNI, and SKY experiencing jumps of over 10%.
