The SEC is considering establishing new regulations for on-chain markets, focusing on the regulatory framework for software applications

Paul Atkins, the chairman of the U.S. Securities and Exchange Commission (SEC), stated that the regulatory agency is considering new rules for on-chain financial markets and related software applications.

Atkins pointed out that current software protocols such as DeFi are difficult to classify within the traditional regulatory framework of exchanges, brokers, or clearinghouses, as a single protocol often has multiple functions including trade execution, collateral management, liquidity routing, and settlement. His remarks are seen as the SEC adopting a more open attitude towards the crypto industry, which is friendlier compared to his predecessor Gary Gensler. Meanwhile, the SEC is also exploring innovative exemption mechanisms for tokenized securities and advancing the clarification of the digital asset classification system.