Key facts
- SEC Commissioner Hester Peirce stated that publishing open-source blockchain code is protected by the First Amendment.
- Peirce argued that DeFi code developers should not be automatically classified as securities intermediaries.
- Legal liability should fall on those who engage in unlawful conduct, not on the creators of the tools.
- The SEC's Crypto Task Force is reviewing how existing securities laws apply to digital assets and decentralized systems.
- SEC staff guidance suggests some front-end platforms for decentralized protocols may not qualify as brokers.
SEC Commissioner Hester Peirce asserted that the act of publishing open-source blockchain code is a constitutionally protected activity under the First Amendment. Speaking at the IC3 Blockchain Camp at Princeton University, Peirce argued that developers releasing decentralized finance (DeFi) code should not be automatically deemed securities intermediaries simply because their creations are used by others. She emphasized that legal liability should be directed at individuals who engage in unlawful conduct, rather than those who developed the underlying tools.
These remarks align with a broader regulatory reassessment within the SEC, particularly under Chair Paul Atkins, who has expressed a desire to move away from 'regulation by enforcement.' The agency's Crypto Task Force is currently examining the application of existing securities laws to digital assets and decentralized systems. Peirce, a consistent advocate for clearer crypto regulations, has been instrumental in this effort. She highlighted that the SEC's current rulebook was designed for traditional intermediaries like brokers and exchanges, questioning its applicability to distributed blockchain networks that serve purposes beyond securities transactions.
This perspective is further supported by recent SEC staff guidance indicating that certain user interfaces providing access to decentralized protocols might not be classified as brokers under existing definitions. The SEC's draft Strategic Plan through fiscal year 2030 also identifies blockchain and crypto assets as technologies poised to reshape financial infrastructure. Collectively, these actions suggest an agency actively working to redefine regulatory boundaries in the evolving digital asset space.