SEC Chair Paul Atkins on May 8, 2026 told an audience at the Special Competitive Studies Project AI+ Expo that the agency is preparing rulemaking for four onchain market categories: crypto vaults, onchain exchanges, brokers and dealers, and clearing systems. Speaking in Washington, Atkins said today’s blockchain protocols collapse functions normally split across separate regulated entities, and existing securities rules need to be rewritten rather than retrofitted. He also renewed his call for Congress to pass the CLARITY Act and signaled a “limited innovation pathway” could arrive within months.
A crypto vault is an onchain software application that lets users passively deposit digital assets into smart-contract strategies that generate yield from decentralized finance markets.
Key takeaways
- Atkins flagged crypto vaults, onchain exchanges, brokers, and clearing systems as the four areas the SEC plans to address through formal rulemaking, not enforcement.
- The chair compared the moment to Regulation ATS in 1998, suggesting a tailored framework rather than retrofitting blockchain into legacy categories.
- Atkins publicly backed the CLARITY Act and asked Congress to send it to President Trump’s desk, calling statutory clarity the most durable form of future-proofing.
- A “limited innovation pathway” for onchain trading could come in the near term, ahead of broader exchange-definition rulemaking.
Published: May 10, 2026, 09:00 UTC
What Atkins actually said
Atkins delivered the remarks at the SCSP AI+ Expo, an event focused on the intersection of artificial intelligence and national competitiveness. The full speech is posted on the SEC’s website. The chair argued that software-based financial protocols increasingly perform functions that traditional rules assign to separate regulated entities, including matching trades, holding collateral, routing liquidity, settling transactions, and automating strategies inside a single piece of code.
“Crypto vaults are onchain software applications that are often designed to allow users to earn yield passively,” Atkins said, calling out the category as one where the SEC needs to issue clearer guidance under both the Securities Act and the Investment Advisers Act. He said the Commission is also reviewing how broker-dealer and clearing-agency rules apply when settlement is near-instantaneous and counterparty risk is managed algorithmically rather than by a central counterparty.
The reference point Atkins kept returning to was Regulation ATS, the 1998 framework the SEC built for alternative trading systems after electronic markets started to outgrow the traditional exchange model. Atkins suggested a similar tailored approach, using guidance, exemptions, and notice-and-comment rulemaking, rather than forcing onchain protocols into categories built for floor brokers and clearinghouses.
Why this matters for DeFi and onshore activity
The speech is the clearest signal yet that the current SEC plans to regulate decentralized finance through written rules instead of subpoenas. That distinction has real consequences. Under the prior administration, protocols including Uniswap and Coinbase faced Wells notices and lawsuits that took years to resolve and produced little durable guidance for the rest of the industry. Atkins is publicly rejecting that approach.
For DeFi protocols, the immediate question is whether crypto vaults that run automated yield strategies will be treated as securities, investment companies, or some new category. Aave, Morpho, Pendle, and Yearn all operate vault-style products that move user deposits across lending markets, liquid staking tokens, and structured yield positions. A clarified rule could give these teams a registration path or an exemption, but it could also pull them under the Advisers Act for the first time.
The CLARITY Act endorsement is the other piece. The bill, formally the Digital Asset Market Clarity Act, splits jurisdiction between the SEC and the CFTC and is scheduled for a Senate Banking Committee vote on May 14, 2026, according to recent reporting. Atkins told the audience that statutory language would lock in the framework more durably than agency rulemaking alone.
Impact on markets and onshore migration
Atkins explicitly framed the rulemaking effort as a way to prevent crypto activity from drifting offshore, citing the FTX collapse as an example of what happens when major markets operate outside U.S. oversight. Robinhood CEO Vlad Tenev separately said this week that “real momentum” is building behind CLARITY, and Consensys policy lead Bill Hughes argued the bill could pull trading volume back to U.S. venues if it passes.
Token markets reacted modestly. Bitcoin held above $80,000 through the speech, with the broader market cap hovering near $2.69 trillion, according to CoinGecko data on May 9. DeFi governance tokens including AAVE, UNI, and MKR posted small gains as traders priced in a more permissive regulatory path. None of the reactions were dramatic, which itself reflects that the announcement was a signal of intent rather than a finished rule.
What comes next
Atkins said the SEC may publish a “limited innovation pathway” before pursuing the broader exchange-definition rulemaking. That sequencing matters. A narrow pilot program could let specific onchain trading systems operate under tailored conditions while the agency drafts the longer rule. Industry counsel will be watching for: which categories of vaults and protocols qualify, whether registration is required or exempt, and how custody and disclosure obligations translate into smart-contract environments.
The Senate Banking Committee vote on the CLARITY Act on May 14 is the next public marker. If the bill clears committee, House passage and a Trump signature would lock in the SEC-CFTC division of labor that Atkins’s speech assumes. If it stalls, the SEC will be left to do the work alone through rulemaking, a slower path.
Frequently asked questions
What is a crypto vault, and why is the SEC focused on it?
A crypto vault is a smart-contract product that takes user deposits and allocates them into yield-generating DeFi strategies, often across lending, staking, and liquidity pools. The SEC is focused on vaults because they combine investment-management functions with software automation, raising questions about whether they fall under the Securities Act or Investment Advisers Act.
How does Atkins’s plan differ from the previous SEC approach?
The prior SEC under Gary Gensler relied heavily on enforcement actions and Wells notices to set the boundaries for crypto activity. Atkins is proposing to replace that with formal notice-and-comment rulemaking, agency guidance, and a possible limited innovation pathway, modeled on the 1998 Regulation ATS framework for electronic trading systems.
When could new SEC crypto rules take effect?
Atkins did not give a firm timeline, but he indicated a limited innovation pathway could come in the near term. Full notice-and-comment rulemaking typically takes 12 to 24 months. Passage of the CLARITY Act, scheduled for a Senate Banking Committee vote on May 14, 2026, could accelerate parts of the framework if Congress acts.
