A federal securities regulator is drawing a line between being responsible for writing blockchain code and how that code is used — and that distinction could re-shape how the government treats software developers in the decentralized finance sector.
The broader regulatory changes behind the comments
Publishing open-source blockchain software is a protected activity under the First Amendment, U.S. Securities and Exchange Commission Commissioner Hester Peirce said Tuesday at Princeton University’s IC3 Blockchain Camp.
He argued that developers who release DeFi code should not automatically be classified as securities intermediaries just because other people use what they created.
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Legal liability should fall on those who actually engage in illegal conduct, he said — not on those who wrote the underlying tools.
Pearce’s comments fit into a broader rethink underway at the SEC since Chairman Paul Atkins took over.
Source: SEC
The agency is stepping back from what Atkins described as regulation by enforcement, with its crypto task force now reviewing how existing securities laws apply to digital assets and decentralized systems.
Peers, a longtime voice for clearer rules in the crypto sector, has been at the center of that effort.
Rules made for a different world
He pointed to the SEC’s rule book as evidence of the problem. The agency’s rules were designed around intermediaries – brokers, dealers, exchanges, clearinghouses, transfer agents, investment advisers and investment companies.
Pearce questioned whether the same rules make sense when applied to distributed blockchain networks that exist for purposes beyond securities transactions.
His comments come just weeks after SEC staff issued separate guidance addressing broker-dealer registration requirements for certain user interfaces.
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That guidance indicated that some front-end websites and software platforms that provide access to decentralized protocols may not qualify as brokers under the traditional legal definition — a sign that the agency is reconsidering how far its existing categories might extend.
Digital assets as a long-term priority
The SEC has also indicated that crypto and blockchain technology will remain a focus for years to come. In its draft strategic plan through fiscal year 2030, the agency described blockchain and crypto assets as technologies with the potential to reshape America’s financial infrastructure.
Taken together, staff guidance, strategic planning, and Pearce’s speech at Princeton paint a picture of an agency that is trying to re-draw boundaries that were never clearly set.
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