On June 9, 2025, the U.S. Securities and Exchange Commission (SEC) hosted a pivotal event titled “Roundup on DeFi and the American Spirit”, organized under the SEC’s Crypto Task Force. The roundtable aimed to address the future of Decentralized Finance (DeFi), its challenges, and how regulatory frameworks could evolve in alignment with American values.

Roundtable Objective

This session marked the final event in SEC’s Spring Sprint Toward Crypto Clarity series, with the main objective to:

Understand regulatory challenges around DeFi

Balance innovation with investor protection

Align DeFi with American values like economic freedom and technological innovation

 Key Participants

A. SEC Commissioners

 Paul S. Atkins (Chairman)

Proposed the idea of “Innovation Exemption”, allowing startups to experiment with emerging technologies under certain conditions.

 Hester M. Peirce (Commissioner)

Defended coders’ rights, saying that the SEC should regulate only those activities that fall squarely under securities laws.

Caroline A. Crenshaw Mark T. Uyeda

Emphasized investor protection and market integrity.

B. Industry Experts (Panelists)

Jill Gunter (Espresso Systems) – Discussed privacy and scalability in DeFi.

Michael Jordan (DBA) – Focused on decentralized governance.

Omid Malekan (Columbia Business School) – Explained differences between DeFi and traditional finance.

Rebecca Rettig (Zito Labs) – Spoke on legal challenges in DeFi.

Gab Shapiro (Metalex) Addressed smart contract security.

Peter Van Valkenburgh (Coin Center) Highlighted the need for regulatory clarity

Key Discussions

A. What is DeFi?

Commissioner Peirce defined DeFi as:

DeFi is a blockchain-based financial system that aims to replace traditional financial institutions with peer-to-peer transactions and smart contracts.

This reflects a financial model without banks or intermediaries, entirely run on code and blockchain.

B. Regulation Legal Perspective

Centralized entities using DeFi protocols are not exempt from regulations.

Regulating developers might infringe on First Amendment rights, since code is speech in many legal interpretations.

C. Alignment with American Values

Chairman Paul Atkins remarked:

 “DeFi reflects core American values like economic freedom, private property rights, and innovation.”

The message was clear: DeFi is not seen as a threat but a transformative opportunity, provided it protects investors and ensures accountability.

Possible Outcomes

A. Innovation Exemption

Startups and DeFi projects could receive limited regulatory relief, encouraging experimentation while maintaining basic investor safeguards.

B. Clearer Regulatory Guidelines

◾Definitions of what qualifies as a security in DeFi

◾Determining accountability in case of system failures

◾Managing smart contract risks and bugs

C. Global Implications

Overregulation could push DeFi innovation to countries like Singapore or UAE.

A balanced approach could attract institutional investors into DeFi space.

Conclusion

This roundtable was a landmark discussion in DeFi’s evolution under regulatory oversight. Though no final decisions were made, some clear signals emerged:

✅ SEC wants to support innovation

✅ Investor protection is non-negotiable

✅ Clear rules will give DeFi the legitimacy and stability it needs to grow

Final Thoughts

Do you think DeFi should be regulated? Or should it remain fully decentralized as intended?

Drop your thoughts in the comments below!