SEC Signals Policy Shift That Could Reshape DeFi Regulation

The U.S. Securities and Exchange Commission (SEC) has begun to outline a new, more constructive regulatory direction for decentralized finance (DeFi), signaling a major policy shift toward greater alignment between crypto protocols and federal law.

At a recent roundtable, new SEC Chair Paul Atkins stressed DeFi’s compatibility with core American values, including freedom, property rights, and technological innovation. His comments come amid broader structural changes at the agency that include a reduced reliance on litigation and an increased focus on formal rulemaking to provide clarity to the industry.

A Departure from “Regulation-by-Enforcement”

The SEC’s approach to crypto oversight has shifted dramatically since the departure of former Chair Gary Gensler on January 20. Under Gensler, the Commission faced widespread criticism for pursuing its regulatory objectives primarily through enforcement actions and costly litigation.

According to Atkins, that strategy is no longer the default. Speaking before a Senate Appropriations Subcommittee on June 3, Atkins stated that the SEC’s rulemaking will now follow a formal “notice and comment” process, allowing for industry feedback and creating clearer guidelines for market participants.

This procedural change is a core mandate of the SEC’s new Crypto Task Force, which was established on January 21 and is expected to issue its first formal report in the coming months.

What the SEC’s New Stance Means for the DeFi Market

The SEC roundtable on Monday marked a turning point in how regulators are characterizing DeFi platforms. Atkins described DeFi as a reflection of American economic values, signalling institutional openness to decentralized financial systems. Although the agency has not yet finalized a regulatory framework, recent actions show that developers and investors may soon operate with greater legal clarity.

Recent SEC staff guidance also clarified that several common staking mechanisms do not violate existing securities laws. Additionally, the Commission has dropped certain long-standing enforcement cases involving crypto firms, indicating a less adversarial stance toward the sector.

While comprehensive regulation remains in development, the SEC’s expanding posture has prompted discussion of possible market impacts. Investors and developers are now anticipating changes that could improve compliance pathways and reduce legal uncertainty for DeFi protocols operating in the U.S.