Breaking: SEC Stops Treating Crypto Devs Like Criminals - What are the New Rules?

A 12-year journey from government enemy to invited guest

Erik Voorhees walked into the SEC building yesterday. Twelve years ago, he got his first subpoena from the same agency. "Never thought I'd be invited to speak here", he said. But there he was. Speaking at an official SEC roundtable. About DeFi. About the future of money. And what he heard changed everything.

The Moment Everything Flipped

SEC Chairman Paul Atkins stood up. He didn't talk about enforcement. He didn't threaten lawsuits. Instead, he said this: "I have directed staff to consider an innovation exemption".

The room went quiet. An innovation exemption. That means letting crypto projects launch without jumping through years of regulatory hoops. This is the same SEC that spent the last four years suing crypto companies.

How We Got Here

For years, the SEC treated crypto like the enemy. They said staking crypto might be illegal securities trading. They suggested people who make wallet software might need broker licenses. It was insane. Like saying Ford needs a taxi license because people drive their cars for Uber. The result? American crypto companies fled to other countries. Innovation moved overseas.

Meanwhile, crypto kept growing. DeFi protocols processed billions of dollars. Without any major crashes. When centralized crypto companies like FTX collapsed, DeFi kept working. The code didn't steal customer money. It couldn't.

Then Trump won. He promised to make America the "crypto capital of the planet". He put Paul Atkins in charge of the SEC. Atkins actually understands this stuff.

Yesterday, Atkins explained the problem. Current securities laws assume there's always a company in charge. A CEO. A board. Someone to regulate. But DeFi is different. It's just code. Self-running software.

"Many entrepreneurs are developing software that functions without any operator", Atkins said. No CEO. No headquarters. Just math and code that can't be shut down or corrupted.

Key points from Chairman Paul Atkins’ remarks today at “DeFi and the American Spirit,” SEC’s Crypto Task Force Roundtable on Decentralized Finance – a 🧵

— U.S. Securities and Exchange Commission (@SECGov) June 9, 2025

Breakthrough Moment

Then Atkins said something that made everyone's jaw drop. He compared prosecuting DeFi developers to suing car companies for bank robberies.

"It would be irrational to hold the developer of a self-driving car liable for a third-party's use of the car to commit a traffic violation or rob a bank".

The message was clear: we're not going to punish engineers for writing code. This is huge. For years, developers were scared to build anything crypto-related in America. Now the top financial regulator is saying: build it. We won't come after you for how other people use your software.

The innovation exemption would work like this:

Instead of spending two years and millions of dollars getting regulatory approval, DeFi projects could launch quickly. They'd still follow basic rules. But they wouldn't need to wait for the SEC to understand their technology.

Think of it as a fast lane for crypto innovation. Right now, if you want to create a new type of financial product, you need lawyers, compliance officers, and years of paperwork. With the exemption, you could launch and figure out the details later.

The Skeptics

Not everyone is convinced this is smart.

Commissioner Hester Peirce warned the audience: "Just slapping a 'decentralized' label on something doesn't mean it's above regulation". She's right. Some projects will try to game the system. But Peirce also supported the overall direction. The SEC just needs to be smart about which projects qualify.

Traditional banks are nervous too. They've spent decades building compliance systems. Now they might compete with software that doesn't need any of that overhead.

The Chess Game

This isn't just about American innovation. It's about global competition. While the US was suing crypto companies, other countries were building crypto hubs. Singapore welcomed DeFi projects. The UAE created crypto-friendly zones. Even tiny countries like El Salvador embraced Bitcoin.

America was losing the future of finance. Trump's team realized this. They saw crypto as a national competitiveness issue. If America doesn't lead in financial technology, China will. Or Europe. Or some small country that gets there first.

The SEC still needs to write the actual rules. Staff meetings aren't law. But the signal is clear. The war on crypto is over. Instead of "how do we stop this?" the question is now "how do we make this work?"

The next chapter starts now.

If you have any thoughts or feedback that you would like to share, you can write to team@etherworld.co or @ether_world

Similar Reads

• Ethereum’s GDPR move adds Privacy but could reshape Decentralization
• Wall Street Meets Web3: SharpLink Bets 425M USD on Ethereum with Consensys at the Helm
• India, Australia, Germany, US: A Global Look at Cryptocurrency Regulation
• Ethereum Foundation Backs ZKnox for Post-Quantum Security
• EtherStrategy vs. MicroStrategy: Onchain Ethereum Advantage Explained
• Vitalik Buterin Bets on Privacy Pools, A New Chapter for Ethereum Privacy?