The US Securities and Exchange Commission (SEC) is reportedly developing an “innovation exemption” to fuel the production of more onchain products and services. This revelation comes from SEC chair Paul Atkins, a former crypto lobbyist.
During a Monday crypto roundtable dubbed “DeFi and the American Spirit”, organized by the SEC’s crypto task force, Atkins stated that he had directed his team to explore a conditional exemption relief framework. Such temporary exemptions would relieve companies from certain regulatory stipulations to help cultivate innovation in nascent tech sectors, given they adhere to certain conditions.
Atkins revealed that this approach would expedite the process of introducing onchain products and services to the market while the SEC staff deliberates on alterations to the Commission’s policies and regulations. He stated, “An innovation exemption could help realize President Trump’s vision of making America the crypto hub of the world by motivating developers, entrepreneurs, and other compliant firms to innovate with onchain technologies in the United States.”
Atkins further stated that he has urged his team to consider whether amendments to the commission’s rules and regulations would provide necessary accommodation for issuers and intermediaries who aim to operate onchain financial systems. He noted that the existing securities rules and regulations are primarily based on regulating issuers and intermediaries, such as broker-dealers, advisers, exchanges, and clearing agencies, and likely did not account for the possibility of self-executing software code replacing such entities.
The SEC’s Crypto Task Force, initiated on Jan. 21 by acting SEC chair Mark Uyeda, was assigned with constructing an operational crypto framework for the agency. Atkins later disclosed in his June 3 address to the Senate Appropriations Subcommittee on Financial Services that the SEC would refine its crypto policies with “notice and comment” and steer clear of shaping its rules through the courts.
Atkins also criticized the former SEC Chair Gary Gensler’s approach to crypto during Monday’s crypto roundtable. Gensler’s approach, which allegedly involved creating policy through lawsuits and legal settlements rather than rulemaking, drew considerable backlash from the crypto industry. Since Gensler’s resignation on Jan. 20, the SEC has shifted its approach to crypto, terminating longstanding enforcement actions against crypto firms and releasing guidance around common crypto staking activities.
