SEC Chair Backs DeFi, Slams Biden Crypto Policy

SEC Chair Paul Atkins Backs DeFi, Criticizes Biden-Era Enforcement—Signals Policy Shift Toward Innovation

In a major policy signal, U.S. SEC Chairman Paul Atkins voiced strong support for decentralized finance (DeFi) and self-custody, directly criticizing the Biden administration's enforcement-heavy approach to crypto regulation. With crypto markets reacting positively, insiders say the tide is turning—and Ethereum may be the biggest winner.

A New Tone at the Top: SEC Chair Supports DeFi

On June 9, at a policy roundtable titled “DeFi and the American Spirit,” U.S. Securities and Exchange Commission (SEC) Chairman Paul Atkins delivered what could be a landmark address for the future of crypto regulation in America. His remarks marked a sharp departure from the combative stance seen under the prior administration.

“The prior U.S. government administration discouraged Americans from participating in these market-based systems by asserting through lawsuits, speeches, regulation, and threatened regulatory action that participants and staking-as-a-service providers may be engaged in securities transactions,” Atkins said.

Key Takeaways from Atkins’ Speech:

Criticized past administration for stifling crypto innovation
Endorsed DeFi protocols and self-custody
Proposed an “innovation exemption” for on-chain development
Pledged support for regulatory clarity and decentralized participation

Self-Custody: A "Foundational American Value"

Perhaps the most notable aspect of Atkins’ remarks was his strong defense of self-custody, calling it a “foundational American value.”

“I’m in favor 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 noted.

Self-custody platforms empower users to control their own private keys, removing third-party intermediaries and enhancing both decentralization and security. This stands in stark contrast to centralized exchanges and custodians, which have historically been vulnerable to hacks, censorship, and regulatory pressure.

Yet under the Biden administration, platforms like MetaMask—a leading self-custody wallet—faced SEC scrutiny and legal action.

Atkins Takes Aim at SEC Overreach

Atkins was blunt in his assessment of the Biden-era enforcement strategy, suggesting that lawsuits and regulatory ambiguity harmed both innovation and investor confidence.

“Unfortunately, the prior administration undermined innovation in self-custodial digital wallets and other on-chain technologies by asserting through regulatory actions that the developers of such software may be conducting brokerage activities,” he said.

This line of attack appears aimed directly at cases brought against developers of DeFi protocols and non-custodial platforms. These actions were widely criticized in the crypto community for equating code development with financial intermediation, raising concerns about free speech and open-source development.

Innovation Exemption: A New Path Forward?

In perhaps the most important policy development, Atkins revealed that he has instructed SEC staff to create a conditional exemptive relief framework, which he dubbed an “innovation exemption.”

“I have directed the staff to consider a conditional exemptive relief framework... that would expeditiously allow registrants and non-registrants to bring on-chain products and services to market,” he said.

This proposal could drastically reduce the legal and procedural burden for crypto developers, staking providers, and DeFi protocols. If implemented, the exemption may allow innovative projects to operate within a compliant framework—without needing to navigate decades-old regulations not designed for blockchain technologies.

Industry Reacts: From Skepticism to Optimism

The crypto industry responded swiftly—and positively.

Uniswap (UNI) founder Hayden Adams celebrated the moment as a turning point in DeFi’s journey from fringe to mainstream:

“Insane how far DeFi has come so quickly. Now, government agencies publicly recognize it as a national priority.”

Ethereum advocate Eric Conner went a step further, arguing that Ethereum stands to be a net beneficiary of the proposed changes.

“If this becomes policy… Ethereum gets regulatory clarity for staking, self-custody, and open-source infra. The tide is turning. Let’s build,” he said.

Markets React: ETH Leads DeFi Outperformance

BlackRock Backs ENA Coin’s Blockchain Initiative for Institutional DeFi

The market didn’t wait to react. Following Atkins' remarks and coinciding with Bitcoin’s retest of the $110K mark, Ethereum (ETH) surged 5%, while the broader DeFi sector outperformed the rest of the crypto market by the same margin.

Performance Highlights (June 9):

Ethereum (ETH): +5%
DeFi Sector: Outperformed market by 5%
Bitcoin (BTC): Retested $110K resistance

The positive momentum underscores a growing sense that regulatory headwinds may finally be easing for U.S.-based DeFi developers and investors.

Policy Implications: What Comes Next?

If Atkins’ proposals gain traction, they could usher in the most significant shift in U.S. crypto policy since 2017. Key areas to watch include:

1. Staking-as-a-Service Regulation

Atkins hinted at reclassifying staking protocols and services—often accused of offering unregistered securities—as legitimate market infrastructure.

2. Open-Source Development Protection

Developers working on non-custodial protocols could receive safe harbor protections, so long as they don’t engage in traditional brokerage or custodial activities.

3. Legal Clarity for DeFi Participants

Market participants may no longer fear retroactive enforcement for participating in staking, liquidity provision, or governance voting on-chain.

4. Political Implications

Atkins’ remarks also reflect a broader pro-crypto agenda emerging within the Trump camp, suggesting that crypto could become a central issue in the 2024 presidential race.

Final Thoughts: A Potential Turning Point for DeFi in the U.S.

Paul Atkins’ support for DeFi and self-custody represents more than just rhetoric. It may be the clearest sign yet that the U.S. is moving toward constructive engagement with crypto innovation—rather than blanket suppression.

If the “innovation exemption” becomes official policy, the impact could be transformative:

Developers may return to building in the U.S.
Investors could enjoy greater regulatory clarity
DeFi protocols might finally reach mainstream scale

Whether this becomes a lasting policy shift or another short-term signal will depend on how quickly the SEC can formalize and implement the new framework.

For now, the message from the top is clear: DeFi is not the enemy—it’s the future.