According to SEC Chair Paul Atkins’ remarks on Friday at an artificial intelligence expo hosted by the Special Competitive Studies Project, the SEC needs to clarify how its regulatory framework applies to onchain software applications and trading systems. Atkins noted that software applications do not fit neatly into the SEC’s existing regulatory categories, such as broker, exchange, or clearing agency, as a single protocol can execute trades, manage collateral, route liquidity, and settle transactions within a unified automated system.
Atkins called for notice and comment rulemaking to revisit definitions related to exchange, clearing agency, and broker as they apply to onchain trading systems. He also requested clarity around crypto vaults—onchain software applications that allow users to earn yield passively. Last month, the SEC’s Division of Trading and Markets released a staff statement clarifying that interfaces, such as DeFi wallets, would generally not be considered brokers.
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