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The U.S. Securities and Exchange Commission (SEC) is signalling a significant shift in its approach to decentralised finance (DeFi) and self-custody of digital assets, with Chairman Paul Atkins calling self-custody a “foundational American value” at the agency’s final Crypto Task Force Roundtable.
Speaking at the event, titled ‘DeFi and the American Spirit’, Atkins criticised the previous administration’s “heavy-handed approach” to digital assets, referencing the tenure of former SEC Chair Gary Gensler. Atkins stated, “I’m in favour of affording greater flexibility to market participants to self-custody crypto assets, especially where intermediation imposes unnecessary transaction costs or restricts the ability to engage in staking and other on-chain activities.” He further remarked, “The right to have self custody of one’s private property is a foundational American value.”
Atkins announced that the SEC is working on an “innovation exemption” aimed at easing regulatory barriers for DeFi platforms and developers. This exemption, he explained, could allow crypto developers to launch projects without immediate legal risk, a move intended to encourage on-chain innovation and the use of non-custodial digital wallets. “Unfortunately, the prior administration undermined innovation in self-custodial digital wallets and other onchain technologies by asserting through regulatory actions that the developers of such software may be conducting brokerage activities,” Atkins said.
The roundtable, the fifth in a series organised by the SEC’s crypto task force and led by Commissioner, Hester Peirce, covered topics including crypto trading regulation, custody, tokenisation, and the status of tokens as securities. Peirce echoed Atkins’ sentiments, warning against infringing on First Amendment rights and stating that developers should not be held liable for how decentralised tools are used.
Caroline Crenshaw, another Commissioner, commented on the complexity of the issues at hand, saying, “These roundtables have given us a lot to grapple with, to say the least. While the series was billed as a ‘spring sprint towards crypto clarity,’ I am unsure whether we’ve identified much that can be simply or quickly clarified. With issues this complex and stakes this high, it’s better to do it right than fast.”
Industry observers have noted the shift as a potential catalyst for growth in the DeFi sector. The SEC’s new direction is seen as an effort to put users back at the centre of the crypto model, aligning with the founding values of DeFi: economic freedom, transparency, and digital sovereignty. The Trump administration has expressed the intent to make the United States “the global capital of cryptocurrencies,” with recent rollbacks of proceedings against major exchanges such as Coinbase and Ripple illustrating this policy change.
Market participants have responded positively to the SEC’s evolving stance. Crypto commentator Ariela, writing for Cointribune, observed, “Self-custody (formerly viewed with suspicion) is becoming a fundamental right to defend. A strong statement marking the end of the Gary Gensler era!” Another industry voice, quoted by Forbes, reflected, “We should not automatically fear the future,” highlighting a growing consensus that self-custody is both attainable and advisable, provided it is approached with responsibility.
The SEC’s exploration of an “innovation exemption” is expected to encourage further development and adoption of blockchain technologies in the U.S., particularly within the DeFi sector. However, as Atkins noted, “concrete rulemaking is necessary before [the industry] can confidently innovate on American soil.”
Among the projects attracting attention in this evolving environment are:
1] Best Wallet Token ($BEST), which underpins the Best Wallet ecosystem and provides users with access to exclusive features and staking options.
2] SUBBD Token ($SUBBD), an AI-driven Web3 platform designed to transform content monetisation for creators.
3] Dogwifhat ($WIF), a meme coin on the Solana blockchain that has gained momentum through social engagement and listings on leading exchanges.
As the SEC’s regulatory posture continues to evolve, the crypto industry is watching closely to see how these changes will shape the future of digital assets and decentralised finance in the United States.
