SEC Commissioner Peirce: Publishing Open-Source Blockchain Code Should Not Be Subject to Securities Laws

On Tuesday, SEC Commissioner Hester Peirce spoke at Princeton University's IC3 Blockchain Summer Camp, stating that developers of blockchain and DeFi code should not be automatically considered securities intermediaries just because others use their code, and thus should not be subject to federal securities regulations.

Peirce said that releasing open-source software is an activity protected by the First Amendment of the Constitution, decentralized protocols can operate without traditional intermediaries, and the liability for securities law violations should fall on the individuals actually engaging in illegal activities, not the code publishers.

She also warned that the SEC’s rulebook is filled with provisions targeting intermediaries such as brokers, exchanges, and clearinghouses, but extending these rules to decentralized blockchain networks is unreasonable because the uses of distributed networks go far beyond securities trading.

It is noteworthy that Peirce’s remarks are consistent with the overall direction described by SEC Chair Paul Atkins of shifting "from enforcement to regulation."

Since the establishment of the SEC’s Crypto Task Force, they have been studying how to apply existing securities laws to digital assets and decentralized systems.

A few weeks ago, SEC staff issued guidance indicating that certain front-end websites and software interfaces that only provide access to decentralized protocols may not qualify as traditional broker-dealers.

Meanwhile, the SEC explicitly stated in its draft strategic plan for fiscal year 2030 that blockchain and crypto asset technologies will be key focus areas in the coming years because they “have the potential to reshape America’s financial infrastructure.”

In summary, in Peirce’s view, the responsibility for violations should rest with malicious actors, not the developers providing code tools, aiming to relieve American blockchain developers of legal burdens.

Furthermore, during this critical window when the SEC is shifting from an “enforcement mode” to rulemaking, her remarks are not only a policy appeal but may also signal a deep adjustment in the United States’ crypto regulatory approach.

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