Securities and Exchange Commission (SEC) Chairman Paul Atkins declared on Monday that establishing a comprehensive regulatory framework for cryptocurrency markets is a key focus of his leadership, signaling a major shift in the agency’s approach to digital assets.
In a keynote address at the Crypto Task Force Roundtable on Tokenization, Atkins emphasized that the SEC must adapt to accommodate blockchain innovation while maintaining investor protections.
JUST IN: 🇺🇸 SEC Chair Paul Atkins says developing a “rational regulatory framework for crypto” is a top priority for him 👀 pic.twitter.com/H7y2ywC80f
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“A key priority of my chairmanship will be to develop a rational regulatory framework for crypto asset markets that establishes clear rules of the road for the issuance, custody, and trading of crypto assets while continuing to discourage bad actors from violating the law,” Atkins stated.
New Direction for Crypto Regulation
Chairman Atkins, who previously served as an SEC commissioner under President George W. Bush, highlighted that the agency’s regulatory approach will undergo significant changes under his leadership. “It is a new day at the SEC. Policymaking will no longer result from ad hoc enforcement actions,” he declared.
Instead, Atkins plans to utilize the Commission’s “existing rulemaking, interpretive, and exemptive authorities to set fit-for-purpose standards for market participants.” This approach represents a departure from what he described as the SEC’s previous “shoot-first-and-ask-questions-later” enforcement tactics under the Biden administration.
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Focus Areas for Crypto Policy
Atkins outlined three key areas of focus for crypto asset policy:
- Issuance: The SEC aims to establish “clear and sensible guidelines” for distributions of crypto assets that are securities or subject to investment contracts. Atkins acknowledged that current registration forms like Form S-1 require information that may not be relevant or material for investment decisions in crypto assets.
- Custody: The SEC will provide “greater optionality” for registrants in determining how to custody crypto assets. Atkins praised the recent rescinding of Staff Accounting Bulletin No. 121, calling the previous guidance “a grave error” that created “needless confusion.”
- Trading: Atkins favors allowing registrants to trade a broader variety of products on their platforms in response to market demand. He specifically mentioned that nothing in federal securities laws prohibits registered broker-dealers with alternative trading systems from facilitating trading in non-securities.
Criticism of Previous Approaches
Atkins didn’t hold back in criticizing the SEC’s previous handling of cryptocurrency regulation. He described a “head-in-the-sand approach” where the agency perhaps hoped “that crypto would go away,” followed by a pivot to “regulation through enforcement.”
He pointed out that only four crypto asset issuers have conducted registered offerings under current regulations, largely due to challenges in satisfying associated disclosure requirements.
“We cannot encourage innovation by trying to fit a square peg into a round hole,” Atkins stated.
Supporting Trump’s Vision for Crypto
In his address, Atkins explicitly aligned his regulatory approach with President Donald Trump’s vision for the United States to become the “crypto capital of the planet.” He emphasized that for this vision to be realized, “the Commission must keep pace with innovation and consider whether regulatory changes are needed to accommodate on-chain securities and other crypto assets.“
Atkins compared the migration of securities from traditional databases to blockchain-based systems to the transition of audio recordings from vinyl to digital formats, suggesting that on-chain securities could revolutionize markets just as digital audio transformed the music industry.
Preventing Offshore Migration
Atkins expressed concern that overly restrictive regulations could drive innovation offshore. “While the Commission and its staff work to develop a comprehensive regulatory framework for crypto assets, securities market participants should not be compelled to go offshore to innovate with blockchain technology,” he stated.
He indicated interest in exploring “conditional exemptive relief” for entities seeking to bring new products and services to market that may not be compatible with current SEC rules.
Coordination with Administration and Congress
Chairman Atkins concluded his address by expressing eagerness to coordinate with colleagues in President Trump’s administration and Congress “to make the United States the best place in the world to participate in crypto asset markets.“
The speech signals a significant policy shift at the SEC and suggests that cryptocurrency companies may soon operate under clearer regulatory guidelines, potentially fostering greater innovation and investment in the U.S. digital asset space.
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