SEC Heavyweight Backs DeFi & Self-Custody—Ethereum Braces for Impact

In a move that sent shockwaves through crypto circles, SEC commissioner Paul Atkins just threw his weight behind decentralized finance and self-custody solutions. The regulatory olive branch could be Ethereum''s ticket to mainstream legitimacy—or another case of ''regulation theater'' while Wall Street quietly builds its own permissioned chains.

Atkins'' endorsement cuts through the usual regulatory fog, giving DeFi maximalists ammunition against the ''wild west'' narrative. But let''s see if the SEC walks the talk when bankers start losing custody fees to smart contracts.

Ethereum''s price action suggests traders are betting on regulatory tailwinds. Smart money? Maybe. Or just another case of crypto''s chronic optimism disorder—where hope beats fundamentals every time.

Atkins supports DeFi

In addition, Atkins hailed self-custody as a ‘foundational American value’ and backed DeFi protocols. He went on and added, 

“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.”

Self-custody platforms grant users full control over private keys, remove third parties, and enhance decentralization. However, some of these platforms, like MetaMask, were sued by the Biden-era SEC. 

Reacting to the DeFi lawsuits, Atkins blasted the former administration’s action for undermining innovation. 

“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.”

He added that he instructed the agency staff to offer a relief framework for ‘innovation’ to achieve Trump’s vision of making America the crypto capital of the world. 

“I have directed the staff to consider a conditional exemptive relief framework or “innovation exemption” that WOULD expeditiously allow registrants and non-registrants to bring on-chain products and services to market.” 

His remarks were welcomed by key players in the sector. Uniswap [UNI] founder Hayden Adams stated, 

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

As the home and pioneer of DeFi, ethereum could be the net beneficiary of the ‘relief framework’ according to Eric Conner. 

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

ETH surged 5% after the update, probably lifted by BTC retest of $110K. But overall, the DeFi sector outperformed the rest by 5%, underscoring Conner’s outlook. 

Source: Velo