The DeFi Debrief

Week of April 28, 2025: Paul Atkins Sworn in as SEC Chairman; Crypto Task Force Panel on Custody; Paradigm Publishes Op-Ed on Section 1960; New DEF Petition

Paul Atkins Sworn in as SEC Chairman

On April 21, 2025, Paul Atkins was sworn in as the 34th Chairman of the Securities and Exchange Commission (SEC). Chairman Atkins is a former SEC commissioner and has long been an advocate of financial innovation. In March 2025, during his confirmation hearings, Chairman Atkins emphasized his commitment to providing “a firm regulatory foundation for digital assets through a rational, coherent, and principled approach.”

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Chairman Atkins’ swearing in is another significant step towards developing a clear regulatory framework for crypto in the United States. Chairman Atkins’ tenure could help position the United States as a global leader in crypto and DeFi.

DEF commends Commissioner Mark Uyeda for his leadership in steering the SEC toward a more transparent and innovation-friendly regulatory approach to crypto during his time as Acting-Chair. DEF also appreciates the work of Commissioners Uyeda and Hester Peirce in the establishment of the Crypto Task Force, which has been active in rescinding prior guidance and explaining that certain crypto-related activities do not belong in the securities framework.

Of note, DEF remains actively engaged with the Crypto Task Force. DEF submitted guiding principles for a Token Safe Harbor to the Crypto Task Force, which would shield good-faith actors intending to decentralize from liability or coverage under the securities laws. We congratulate Chairman Atkins and look forward to continuing to work with the Commission to protect DeFi’s promising future in the United States.

Crypto Task Force Panel on Custody

On April 25, 2025, the SEC held another Crypto Task Force Roundtable meeting entitled “Know Your Custodian: Key Considerations for Crypto Custody,” with Paul Atkins—the new Chair of the SEC who started earlier in the week—attending and providing opening remarks. Atkins started his remarks by saying that he expects “huge benefits” in innovation in blockchain technology with regards to “efficiency, cost reduction, transparency, and risk mitigation.” He stressed the need for regulatory clarity for market participants, affirming his support for a fit-for-purpose framework. After the rest of the opening remarks given by SEC Commissioners Caroline Crenshaw, Mark Uyeda, and Hester Peirce, the roundtable hosted two panel discussions.

The first, entitled “Custody Through Broker-Dealers and Beyond,” in which panelists called for a regulatory framework that would allow for investors to comfortably choose between self-custody and a qualified custodian. This would come, many panelists remarked, would come through regulatory clarity, and not necessarily from more regulation. The second panel, entitled “Investment Adviser and Investment Company Custody,” covered similar topics, and expanded the discussion to smart contract governance.

When asked whether the SEC should maintain the ability for people to choose self-custody, panelist Neel Maitra noted that, given the landscape of uncertainty that has plagued DeFi, self-custody certainly makes a lot of sense for investors and users. Ultimately, both panels acknowledged that the SEC should act in a way that promotes self-choice and protects investors—not only through financial safeguards, but also by ensuring access to technology that provides autonomy.

Paradigm Publishes Op-Ed on Section 1960

On April 21, 2025, Matt Huang and Katie Biber of Paradigm—a prominent venture capital fund focused on crypto and emerging technologies—published an op-ed criticizing the flawed federal prosecution of Roman Storm, a developer behind Tornado Cash.

The op-ed argues that Storm is being unfairly targeted under an unlawful interpretation of 18 U.S.C. § 1960, the criminal code proscribing unlicensed money transmitting businesses, for writing noncustodial open-source code that he does not control. As Huang and Biber explain, “prosecutors in the Southern District of New York claim that merely developing this tool to allow others to engage in peer-to-peer transactions amounts to a criminal conspiracy to operate an ‘unlicensed money transmitting business.’” They continue: “That’s like attempting to criminalize building Fords because someone might drive a Mustang in a bank robbery.”

Huang and Biber explain, “Storm is not a banker, a broker, or a criminal mastermind. He’s a software developer. Charging him with running a money-laundering enterprise is as absurd as arresting Tim Cook, the CEO of Apple, for one of the likely thousands of crimes committed each day on iPhones. Criminal law demands more than clever theories; it requires fair notice, due process, and actual culpability. Prosecutors are not permitted to peer at a previously-clear federal law and conjure an indictment from between the lines.”

DEF strongly agrees that prosecuting software developers for building tools they neither operate nor control sets a dangerous and unsustainable precedent — ultimately, threatening the foundation of open-source development, contradicting FinCEN’s guidance, and risking the United States’ leadership in developing decentralized technologies. A recent memorandum issued by the Deputy Attorney General announcing the Department of Justice will no longer pursue criminal charges for mere registration violations is a very encouraging step in the right direction. However, as the op-ed authors explain, a more durable and lasting win is needed to ensure that developers and builders of neutral noncustodial software across the crypto industry are protected.

NEW DEF Petition on Section 1960

On April 28, 2025, DEF launched a petition calling on the Trump administration to END the lawless prosecution of software developers in the U.S.

The Biden-era DOJ sought to criminalize open-source software development. Look no further than the prosecution of Roman Storm in the Southern District of New York (SDNY).

We have a real opportunity to shift course under the Trump administration, and we must act swiftly to present a unified DeFi voice to those in gov’t leadership roles to reinforce why this issue is of the utmost importance to the future of financial innovation in the United States.

We hope you will join us in elevating the importance of this issue and in urging the Trump administration to act expeditiously by *ENDORSING* this petition at the link below.

How? You can sign via X or with your wallet for stronger, on-chain validation.

https://section1960.defieducationfund.org/