SEC Chair Atkins Announces New Rules for Onchain Markets and AI-Driven Finance

SEC Chairman Paul Atkins announced on Friday, May 8, 2026 at the AI+ Expo in Washington that the U.S. regulator is considering a comprehensive overhaul of its regulatory framework for blockchain-based financial markets. This announcement marks a strategic shift for the agency, moving from an enforcement-heavy approach to a formal rulemaking process. It is the first time since the Trump administration took office that the SEC has articulated such a clear vision for a regulatory modernization adapted to decentralized financial protocols. Atkins’ speech, delivered before an audience of technology executives, institutional investors and crypto ecosystem representatives, was met with marked interest from all attendees.

Context

Since the rise of decentralized finance and blockchain protocols, U.S. financial regulators have faced a growing challenge. Current securities rules were designed in the mid-20th century, at a time when traditional intermediaries — brokers, exchanges, clearinghouses — constituted the sole pillars of financial markets. These legal categories, inherited from the Securities Exchange Act of 1934, had not anticipated the emergence of software systems capable of executing all of these functions in an automated and decentralized manner. The Howey Test, established by the Supreme Court in 1946 to define what constitutes an investment contract, was never designed to evaluate autonomous computer protocols that involve no human intermediary in the execution of transactions.

The emergence of artificial intelligence agents capable of executing trading strategies at machine speed further complicates the regulatory landscape. These systems now operate on blockchain rails that enable instant value transfers at speeds unprecedented in traditional finance. An AI agent can analyze market data, execute complex trading strategies and settle transactions within milliseconds, without any human intervention. The combination of AI and blockchain creates financial use cases for which no classical regulatory category seems fully suited. Regulators must now consider systems that are simultaneously trading platforms, clearinghouses and asset managers, all without any identifiable legal entity as the operator of the system.

The political context has also evolved significantly. Under the Trump administration, the SEC has made a notable course correction compared to the Gary Gensler era. Massive lawsuits against cryptocurrency platforms have been largely suspended, in favor of a more conciliatory approach aimed at attracting the crypto industry to American soil. Several ongoing legal cases have been dismissed without action, and new internal guidelines have prohibited SEC investigators from initiating proceedings against crypto sector actors without prior management approval. This new regulatory strategy fits within this opening-up logic and aims to position the United States as the leading jurisdiction for innovation in the digital assets space.

The Facts

Addressing an audience of technology and financial industry leaders gathered at the AI+ Expo organized by the Special Competitive Studies Project in Washington, Paul Atkins outlined the broad outlines of the SEC’s regulatory project. The agency is considering a formal notice-and-comment rulemaking process — the classic American regulatory democratization procedure — to adapt the legal framework to current market realities. This contrasts with the enforcement-through-interpretation approach that prevailed under the previous administration. The notice-and-comment process allows all stakeholders to contribute to the regulatory debate before any new rule is adopted, thereby ensuring better sector buy-in.

Four key areas have been identified by the SEC chair. First, onchain trading systems, meaning protocols that enable the exchange of tokens and digital assets in a decentralized manner without going through a centralized intermediary. These protocols, such as decentralized exchanges (DEXs), are capable of matching buyers and sellers automatically through smart contracts. Second, blockchain settlement infrastructure, which ensures the finalization of transactions on distributed ledgers. These systems replace traditional clearinghouses by offering near-instantaneous transaction finality. Third, automated financial applications, including trading bots and strategies executed by artificial intelligence algorithms. These tools are increasingly used by institutional investors to execute complex strategies on crypto markets. Fourth, cryptocurrency vaults, designated by the term « crypto vaults, » which allow users to generate yields passively by depositing their assets into lending or staking protocols. These products have seen exponential growth, with billions of dollars now locked in these protocols.

« A single protocol can execute a trade, manage collateral, route liquidity, execute trading strategies through vault structures and settle the transaction — all within a unified, automated system, often within seconds, » Atkins said during his speech. This description illustrates the fundamentally different nature of DeFi protocols compared to traditional financial institutions, which traditionally separate these functions among several distinct entities subject to their own regulations.

The SEC chair also clarified that current onchain market structures often have a hybrid character, combining elements of traditional finance and decentralized finance. A DeFi protocol can, for example, use oracles to obtain prices from centralized markets while offering decentralized lending services without an intermediary. This hybridization makes classical regulatory categories even more difficult to apply, as a single protocol may simultaneously fall under several distinct legal regimes. Rather than forcing these models into obsolete regulatory categories designed for centralized intermediaries, the agency prefers to clarify its position through formal rulemaking rather than unilateral enforcement actions.

Analysis

This announcement represents a striking contrast with the regulatory policy pursued under the Gary Gensler era, from 2021 to 2025. During that period, the SEC under Gensler’s leadership filed lawsuits against numerous cryptocurrency platforms, accusing them of offering unregistered financial instruments. Legal actions targeted both centralized platforms like Coinbase and Binance and decentralized finance projects like Compound Finance or Uniswap. This strategy was criticized by the industry as retroactive rulemaking, punishing behaviors that were not clearly illegal at the time they occurred. Defenders of this approach argued that securities laws were broad enough to cover these activities, regardless of the technology used.

The shift from an enforcement mindset to a rule-definition approach constitutes a profound philosophical change. The SEC now acknowledges that blockchain protocols cannot be evaluated against legal categories designed for centralized intermediaries. The very notions of « exchange, » « broker » or « clearing agency » require redefinition to encompass software systems that have no identifiable human operator. Rather than requiring each protocol to seek prior authorization to operate as a registered exchange or broker, the regulator is considering redefining the categories themselves to reflect current technological realities. This approach is consistent with the Trump administration’s general philosophy, which favors innovation over coercive regulation.

This evolution is part of a broader harmonization movement between the SEC and the Commodity Futures Trading Commission (CFTC). In February 2026, both regulators organized a joint event titled « Harmonization: U.S. Financial Leadership in the Crypto Era » at CFTC headquarters in Washington. During that event, Chairman Atkins described the initiative as « one of the most ambitious between our two agencies in a generation. » Both institutions are seeking to present a united front to cryptocurrency market participants and reduce the jurisdictional conflicts that have long created harmful regulatory uncertainty for ecosystem development. The boundary between assets that fall under the SEC’s jurisdiction (securities) and those that fall under the CFTC’s jurisdiction (commodities) remains however difficult to draw in the cryptocurrency space.

The SEC also published in March 2026 a joint interpretation with the CFTC concerning the application of federal securities laws to crypto assets. This interpretation aims to clarify the boundary between tokens that constitute securities and those that fall under commodities. The regulator has also implemented a token taxonomy designed to guide market participants in their regulatory compliance. In parallel, the SEC proposed an innovation exemption framework intended to protect nascent projects from any enforcement action during their development phase, provided they respect certain investor protection principles.

Market Reactions

Industry reactions have been largely positive. The DeFi Education Fund, an advocacy organization for decentralized finance, described Atkins’ remarks as « powerful, » welcoming the regulator’s recognition of the distinct nature of DeFi protocols. The organization emphasized that this approach finally acknowledged that decentralized finance could not be treated as a simple extension of traditional financial platforms. The Hyperliquid Policy Center, a think tank specializing in regulatory issues related to Hyperliquid and decentralized trading protocols, expressed encouragement at seeing an SEC chairman « willing to map these systems to existing legal frameworks on their own terms, rather than force them into legacy categories built for legacy architecture. »

These reactions reflect widespread relief within the DeFi ecosystem, long concerned about the regulatory uncertainty that prevailed under the previous administration. Decentralized finance projects feared that the SEC’s aggressive approach under Gensler would stifle American innovation in favor of more welcoming jurisdictions such as Dubai, Singapore, or Luxembourg. Several projects had already announced their relocation outside the United States during the Gensler period, creating an exodus of talent and capital that the current administration is seeking to reverse. Reactions from specialized securities law firms have also been positive, with many anticipating a wave of new regulatory-compliant crypto product offerings once the new rules are published.

Major market participants are now awaiting formal clarifications regarding the regulatory obligations applicable to decentralized finance protocols, decentralized exchange platforms and structured products backed by cryptocurrencies. Specialized securities law firms anticipate a significant increase in regulatory compliance consultation requests in the coming months, as crypto companies adjust their compliance strategies. The compliance teams of major crypto platforms are already working on developing internal policies consistent with the general guidance outlined by Atkins during his speech.

Perspectives

Despite this more accommodating approach, Paul Atkins stressed that the SEC does not intend to let crypto markets operate indefinitely in a regulatory vacuum. « Our job is to set the rules of play and referee the game, not to pick the winning team, » he emphasized, citing a phrase that has become famous in the industry and reusing the sports analogy he had already employed in previous public appearances. This declaration aims to calm the concerns of those who fear the SEC may become too close to the industry it regulates, and reminds that the regulator’s role remains to protect investors and market integrity.

The regulator maintains that it already has the tools necessary to intervene in the cryptocurrency market under existing securities laws. The SEC has also reiterated its support for the CLARITY Act, a bipartisan legislative proposal that would establish a shared regulatory framework between the SEC and CFTC for digital assets. This legislative text, which had been approved by the House of Representatives but stalled in the Senate, could gain new momentum thanks to the Trump administration’s explicit backing. However, Atkins emphasized that legislation alone cannot provide the certainty that investors and market participants deserve, and that the SEC’s regulatory process would provide essential complementary guidance to complete any future legislative framework.

In the short term, industry professionals expect a multiplication of public consultations and formal regulatory proposals. The notice-and-comment process typically provides for a consultation period of several months during which industry participants can submit their comments. Final regulatory proposals could come within eighteen to twenty-four months, depending on the priority given to the crypto file by the administration. During this transitional period, sector companies are encouraged to actively participate in the consultation process and advocate for their interests with the regulator.

Decentralized finance projects and token issuers will need to closely monitor the next steps in the regulatory process, which could permanently redefine the sector’s compliance obligations. Companies that invest now in understanding the new rules will have a significant competitive advantage when they take effect. Competing jurisdictions, such as the European Union with its MiCA regulation, are also watching this evolution with interest, as American regulatory choices will influence global industry standards.

Sources

• SEC chair Atkins signals new rules for onchain markets, AI-driven finance — CoinDesk
• SEC weighs new rulemaking for onchain market structures and software applications — The Block
• SEC Chair Atkins Eyes Overhaul of Crypto Market Rules — Yahoo Finance
• CFTC and SEC Signal New Era of Crypto Harmonization — Consumer Financial Services Law Monitor
• SEC hints at new ‘rules of play’ for crypto trading — TheStreet