SEC Chair Atkins Proposes New Rulemaking for Onchain Markets and Software Applications on Friday

According to SEC Chair Paul Atkins, speaking on Friday at an AI expo hosted by the Special Competitive Studies Project, the Securities and Exchange Commission needs to clarify how its regulatory framework applies to software applications as it considers new rules for onchain financial markets. Atkins noted that software applications do not fit neatly into existing SEC regulatory categories such as broker, exchange, or clearing agency. A single protocol can execute trades, manage collateral, route liquidity, and settle transactions within a unified, automated system, often in seconds. Atkins called for the SEC to conduct notice-and-comment rulemaking to revisit definitions of exchange, clearing agency, and broker as they apply to onchain trading systems, and to provide clarity around crypto vaults—onchain software applications that allow users to earn yield passively.