U.S. Securities and Exchange Commission (SEC) Chair Paul Atkins has signaled a possible overhaul of existing securities regulations in light of the rapid adoption of blockchain-based financial markets and the growing influence of artificial intelligence in finance. Speaking at the AI+ Expo in Washington, Atkins noted that digital asset firms are increasingly shifting their trading and settlement processes to blockchain infrastructures, making traditional market rules insufficient to meet evolving needs.
Traditional frameworks clash with blockchain reality
Atkins explained that current securities regulations were built around conventional market players such as brokerages, exchanges, and clearinghouses. However, in emerging blockchain platforms, a single software protocol can undertake many intermediary roles at once. He highlighted how on-chain trading systems, blockchain-based settlement frameworks, automated financial applications, and crypto vaults now blur the lines between classic institutions and new technology-driven models.
Atkins also reflected on the tenure of his predecessor, Gary Gensler, observing that while Gensler recognized these technological shifts, the SEC under his leadership focused more on centralized exchanges and their consolidation of functions—an approach that often played out through enforcement actions and lawsuits.
A protocol can execute transactions, manage collateral, direct liquidity, enable vault-based trading strategies, and complete the entire process autonomously.
He emphasized that “on-chain market structures now frequently combine both traditional and decentralized finance features,” and argued for a transparent and clear regulatory process to address how these hybrid models should be treated under existing rules.
SEC explores new approaches and case-by-case analysis
Atkins’ remarks signal a clear departure from the SEC’s previous enforcement-heavy stance. During the Trump administration, the SEC had introduced various guidelines, legal exemptions, and public statements to reduce legal uncertainty for digital asset firms—an effort that reflected a more collaborative regulatory posture.
Atkins noted that potential regulatory updates are closely linked to the increasing use of AI-driven, automated systems in finance. He pointed out that artificial intelligence algorithms are rapidly becoming integral to decision-making and value transfer across markets, integrating tightly with blockchain systems.
The SEC must avoid force-fitting emerging technologies into outdated regulations; our job is to set clear rules and manage the process fairly, not to anoint winners in advance.
Regulatory agenda and Congressional collaboration
Atkins further stressed that these shifts aren’t limited to technological advances alone; Congress must establish a clear regulatory framework for crypto markets. Initiatives like the CLARITY Act envision splitting oversight of digital assets between the SEC and the Commodity Futures Trading Commission (CFTC), an approach designed to reduce market uncertainty and legal risk.
The SEC remains the principal authority responsible for market regulation and investor protection in the United States. Atkins’ proposed direction is seen as an important turning point, suggesting that regulation must advance in step with technological progress.
