SEC Chair Paul Atkins Defends Crypto Self-Custody Rights
US Securities and Exchange Commission Chairman Paul Atkins has taken a decisive stance on cryptocurrency regulation, calling the right to self-custody digital assets a “foundational American value” during the agency’s latest DeFi roundtable. This marks a significant departure from the enforcement-heavy approach adopted under former Chairman Gary Gensler.
Atkins Criticizes Previous Administration’s Crypto Approach
During Monday’s roundtable event titled “DeFi and the American Spirit,” Atkins delivered pointed criticism of the previous administration’s regulatory strategy. The new SEC Chairman argued that former Chair Gary Gensler’s approach relied too heavily on enforcement actions through the courts rather than establishing clear regulatory frameworks.
“Unfortunately, the prior administration undermined innovation in self-custodial digital wallets and other onchain technologies by asserting through regulatory actions that the developers of such software may be conducting brokerage activities,” Atkins stated during the event.
Crypto self-custody concept
Self-Custody as Core American Value
Atkins emphasized that cryptocurrency self-custody aligns with fundamental American principles of property ownership and economic freedom. He expressed strong support for allowing market participants greater flexibility in managing their digital assets without unnecessary intermediation.
“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 onchain activities,” the SEC Chairman explained.
The Chairman’s remarks suggest the agency will move away from questioning whether self-custody wallet developers are conducting unregistered brokerage activities—a concern that created significant regulatory uncertainty under the previous administration.
Innovation Exemption for DeFi Platforms
In a significant policy development, Atkins revealed that the SEC is working on an “innovation exemption” for decentralized finance platforms. This initiative aims to reduce regulatory barriers while fostering blockchain-based financial innovation.
The proposed exemption would allow DeFi platforms to operate with fewer restrictions, potentially revolutionizing how decentralized protocols interact with traditional securities regulations. This represents a fundamental shift from the enforcement-first approach that characterized the Gensler era.
DeFi regulatory framework
SEC’s Regulatory U-Turn Under Trump Administration
Since President Donald Trump took office and Gensler departed in January, the SEC has demonstrated a markedly different approach to cryptocurrency regulation. The agency has already agreed to drop enforcement actions against major crypto exchanges like Coinbase and has signaled similar moves regarding the Ripple case.
This policy reversal reflects the broader Trump administration’s commitment to fostering cryptocurrency innovation within the United States. Commissioner Caroline Crenshaw acknowledged the complexity of the issues discussed during the recent roundtable series, noting that achieving “crypto clarity” requires careful consideration rather than rushed decisions.
Industry Response and Future Implications
The cryptocurrency industry has welcomed Atkins’ pro-innovation stance, particularly his defense of self-custody rights. This regulatory approach could significantly impact how Americans interact with digital assets, potentially reducing compliance burdens for wallet developers and DeFi protocols.
The SEC’s crypto task force, led by Commissioner Hester Peirce, has conducted five roundtable discussions in 2025 covering various aspects of digital asset regulation. These sessions have addressed crypto trading, custody, tokenization, and securities classification—all critical areas for industry development.
Atkins at crypto roundtable
As the regulatory landscape continues evolving, Atkins’ emphasis on self-custody rights and innovation-friendly policies signals a new era for cryptocurrency regulation in the United States. This shift could position America as a global leader in digital asset innovation while maintaining appropriate investor protections.
The Chairman’s commitment to moving beyond “ad hoc regulation by enforcement” toward comprehensive rulemaking represents a fundamental change that could provide the regulatory clarity the crypto industry has long sought.
