Hello, friends! Observing from the sidelines as the U.S. Securities and Exchange Commission (SEC) finally starts to seriously tackle decentralized finance (DeFi), one can't help but notice that it resembles a rather slow, yet still a shift. For the past four years, according to Commissioner Uyeda, their approach has been, let's say, not the most open. It seems the SEC preferred to sit back while the DeFi world rapidly developed. But now, it appears they are getting to work to understand how to deal with this new, wild financial world.
Silence is no longer an option: Changing the SEC’s strategy
Previously, the SEC essentially operated on the principle of 'don’t disturb trouble while it’s quiet'. Entrepreneurs trying to build something in DeFi were rather deterred. No clear rules, no dialogue. Imagine building a house, and the authorities just ignore your questions but can come at any moment for an inspection. It’s no surprise that many projects simply went where the attitude was more understandable. Such an approach, of course, stifled development and scared off those bringing innovation.
But now, at least, something has changed. A Crypto Task Force has emerged. And this is essentially their attempt to catch up. Commissioners Uyeda, Peirce, and Chair Atkins now speak of dialogue, transparency, and finding answers. They hold roundtables and listen to market participants. This indicates that the SEC has begun to realize: without dialogue, it won’t work. Such a shift gives hope for the emergence of reasonable and useful rules that will not stifle innovation but help it to develop.
DeFi and the 'American spirit': An attempt to understand the new through old values
The most curious statements came from Commissioner Peirce and Chair Atkins. Peirce directly states that DeFi resonates deeply with the American spirit. Why? Because it is about freedom. The freedom to transact directly, without intermediaries, without anyone's permission. It's like writing a book without censorship. And code, in her opinion, is also protected speech. Here, of course, the SEC must be very careful not to infringe on the fundamental freedoms that, in fact, underpin the U.S. (at least that’s how it’s declared).
Chair Atkins echoes her, speaking about the right to self-custody of crypto assets. This is a basic right to private property that should not disappear when you go online. He even gives this analogy: if someone steals a self-driving car and breaks the rules, the thief is to blame, not the manufacturer of the car. The same goes for self-custody software developers. They are just writing code. If the SEC recognizes that DeFi and these values go hand in hand, it’s a strong argument against excessive regulation. After all, the goal is not to control every step, but to protect investors without infringing on fundamental rights.
DeFi Developers: Creators of code or responsible intermediaries?
Here we come to one of the most pressing questions that hangs in the air after the commissioners’ speeches: who is responsible in a world where finances increasingly depend on code?
Should DeFi developers be protected like those who create open-source software? Or should they be held accountable like ordinary financial intermediaries?
Commissioner Peirce gives us food for thought. She says that if someone simply publishes a DeFi protocol code, it is protected by the First Amendment of the U.S. Constitution. This means the SEC cannot demand prior approval. It makes sense: the author of a book is not responsible for how others use it, right? But if that same person, in addition to publishing code, also manages the platform, holds others' assets, or makes decisions for clients, then perhaps they are already subject to regulation. Here, the SEC is trying to draw a fine line. If you are just writing code and sharing it, that’s one thing. But if you actively participate in managing financial operations through that code, then be prepared to be considered an intermediary. This is critically important because the future of finance lies in code, and the rules must change with it.
It’s not so simple: Caution over speed
But not everything is as rosy and straightforward as it seems. Commissioner Crenshaw cools the enthusiasm of her colleagues a bit. She emphasizes that "crypto" is not a homogeneous entity. There are many opinions and technologies, and not all of them are the same. Crenshaw states that decisions will not be quick and easy. It is more important to do everything correctly than to rush and make mistakes. Hastiness can lead to bad rules that harm everyone. It is better to take the time to understand and release well-thought-out solutions.
However, while officials hold roundtables and discuss how best to 'keep up' with DeFi, the decentralized world is not standing still. It continues to evolve at a breakneck pace, offering new products and services. It’s like trying to catch a train while you’re standing at the station discussing the best route. A delay in decision-making can lead to the point where there’s nothing left to regulate or, worse, all innovations will move to other jurisdictions.
Regulation: Finding the golden mean
So where is this golden mean? The SEC must protect investors and support fair markets. But how can this be done when the usual intermediaries are absent?
Commissioners are asking questions: when do DeFi systems remove intermediaries? When do they go beyond securities laws? What guarantees do investors need in this new world?
Chair Atkins even proposes the idea of an 'innovation exemption'. This is a path that allows new products and services to quickly enter the market, but with certain conditions. And, of course, all this is to make America the 'crypto capital of the planet'. Sounds ambitious, but the idea is sound. The SEC is trying to find a balance between protecting investors and supporting innovation, creating new, flexible rules rather than trying to force DeFi into old frameworks.
So what’s next?
In general, the SEC seems to have finally embarked on the path of understanding DeFi. They acknowledge the complexities, are ready to listen, and most importantly, are looking for ways to regulate without killing innovation.
This path will be long, with bumps and turns. But if the SEC continues this open dialogue and genuinely listens to those building the future of DeFi, then the U.S. has every chance to become the center of this new financial revolution. After all, in the end, the main thing is to create an environment where innovation thrives while keeping people protected. And it seems that the SEC is beginning to understand this.