SEC Chair Paul Atkins Signals Regulatory Shifts for Onchain Trading and AI-Enabled Financial Services
The head of the SEC connected the expansion of AI-powered financial tools with an increasing need for blockchain-based market infrastructure and automated clearing systems.
What to know:
— SEC Chair Paul Atkins stated that the agency is evaluating new regulations for onchain trading platforms, cryptocurrency vaults, and blockchain settlement networks as finance becomes more reliant on blockchain technology and artificial intelligence.
— Atkins noted that current securities laws are not well-suited for blockchain protocols that merge various market functions into a single software system.
— Describing this initiative as part of a wider transition toward AI-driven, automated finance, he emphasized that the SEC should clarify its stance on hybrid traditional-decentralized market models through formal rulemaking rather than enforcement actions.
SEC Chair Paul Atkins announced on Friday that the agency is exploring modifications to how securities regulations apply to blockchain-based financial markets and AI-powered financial applications, as digital asset companies increasingly shift trading and settlement operations onchain.
Addressing the AI+ Expo in Washington, Atkins revealed that the SEC is considering formal rulemaking concerning onchain trading systems, blockchain settlement infrastructure, automated financial applications, and crypto vaults that increasingly obscure the boundaries between traditional market participants.
Existing securities rules were developed around traditional market intermediaries such as brokers, exchanges, and clearinghouses, he argued, while newer blockchain systems often consolidate those functions into a single software protocol. Atkins’ predecessor, Gary Gensler, shared a similar perspective, though he concentrated more on centralized exchanges that the SEC claimed provided those different functions under one roof at the time, primarily through litigation.
‘A single protocol can execute a trade, manage collateral, route liquidity, execute trading strategies through vault structures and settle the transaction,’ Atkins said.
‘We should remember that onchain market structures today are often hybrid in nature, combining elements of what are often referred to as ‘traditional’ and ‘decentralized’ finance,’ he said. ‘We should clarify how the Commission views the spectrum of models that may implicate our statutes through notice and comment rulemaking, using our exemptive authorities where necessary and prudent.’
Atkins’ remarks underscored the latest development in the regulatory agency’s move away from the enforcement-focused strategy under former Chair Gary Gensler. Under President Donald Trump’s administration, the SEC has issued crypto-related staff guidance, no-action reliefs, and public statements aimed at reducing legal uncertainty for digital asset firms.
The chair characterized the potential changes as part of a broader shift toward an AI-driven and automated financial infrastructure. He argued that artificial intelligence agents will increasingly participate in markets and financial decision-making at machine speed, while blockchain rails allow those systems to move value instantly.
The SEC, he said, should avoid locking emerging technologies into outdated rules.
‘Our job is to set the rules of play and referee the game, not to pick the winning team,’ Atkins said.
He also reiterated support for congressional efforts to pass crypto market structure legislation, including the CLARITY Act, which would establish a regulatory framework for digital assets shared between the SEC and Commodity Futures Trading Commission (CFTC).