- SEC reviews how securities laws apply to onchain trading systems and AI-driven finance.
- Paul Atkins signals potential rulemaking for broker definitions and automated settlement systems.
- SEC backs CLARITY Act while reviewing regulatory framework for blockchain markets.
SEC Chair Paul Atkins said the agency is reviewing how federal securities laws apply to blockchain-based trading systems, automated financial applications, and artificial intelligence-driven financial infrastructure as more financial activity moves onchain.
Speaking Friday at the AI+ Expo in Washington, Atkins outlined several areas where the Securities and Exchange Commission (SEC) may introduce formal rules or updated guidance. The remarks focused on how existing securities models interact with blockchain protocols that combine trading, settlement, collateral management, and liquidity functions into a single system.
According to Atkins, many current regulations were built around traditional financial intermediaries such as brokers, exchanges, and clearing agencies. However, blockchain-based systems now allow software protocols to perform several of those functions simultaneously.
The SEC chair stated that onchain financial systems often combine features of both traditional and decentralized finance. As a result, the agency is considering whether notice-and-comment rulemaking and exemptive authorities may be necessary to clarify how securities laws apply across different blockchain market structures.
SEC Reviews Onchain Trading and Crypto Vaults
Atkins identified four specific areas currently under review by the SEC. These include onchain trading systems, broker and dealer definitions, clearing and settlement models, and blockchain-based “crypto vaults” that allow users to earn passive yield through automated onchain strategies.
Regarding brokers and dealers, Atkins said the SEC is examining how existing legal definitions should apply to software interfaces and blockchain-based applications. He also pointed to the clearing agency model as another area requiring review, particularly as blockchain networks enable transactions to settle instantly through automated code rather than traditional post-trade systems.
Atkins separately highlighted crypto vaults as an emerging category requiring additional regulatory clarity under securities laws.
AI and Blockchain Infrastructure Become Central Focus
The SEC chair linked the rise of artificial intelligence in financial markets with growing demand for blockchain settlement infrastructure capable of supporting automated activity at machine speed.
According to Atkins, AI systems are expected to play a larger role in financial decision-making and market participation, while blockchain rails increasingly support the real-time movement of value and automated settlement.
He also reiterated his support for the CLARITY Act, which would establish a shared regulatory framework between the SEC and the Commodity Futures Trading Commission. Atkins said excessive legal uncertainty could push innovation outside the United States, referencing the collapse of the offshore exchange FTX as an example tied to offshore market activity.
Related: CLARITY Act Heads to Key Senate Banking Committee Vote on May 14
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