Atkins: SEC Will Develop Crypto Policy Through ‘Notice and Comment’ Process
The U.S. Securities and Exchange Commission is set to refine its cryptocurrency policies through a “notice and comment” process, moving away from shaping regulations primarily via court rulings, according to agency chair Paul Atkins during his testimony to Congress.
In his June 3 remarks to the Senate Appropriations Subcommittee on Financial Services, Atkins stated that the SEC’s approach to crypto policymaking “will be conducted through notice and comment rulemaking, not through regulation by enforcement.”
“The commission will use its existing authorities to establish appropriate standards for market participants,” he further explained.
Atkins, who previously worked as a crypto lobbyist, emphasized that devising a “rational regulatory framework for crypto assets” is a primary focus for the SEC during his leadership.
His predecessor, former SEC Chair Gary Gensler, faced criticism from the crypto industry, which argued that he developed crypto policy mostly through litigation and settlements rather than through formal rulemaking.
Paul Atkins indicated that the SEC’s policymaking will pivot towards notice-and-comment rulemaking. Source: YouTube
Atkins noted that the SEC’s enforcement strategy will realign with Congress’s original intent, emphasizing the need to monitor violations of established obligations, particularly in relation to fraud and manipulation.
He mentioned that the SEC aims to create “clear rules of the road” for the issuance, custody, and trading of crypto, simultaneously discouraging unlawful actions by bad actors.
“Clear rules of the road are essential for protecting investors from fraud, especially to help them recognize scams that do not comply with the law,” he remarked.
Democrat Senator Chris Coons inquired if Atkins would support crypto exchanges managing traditional securities alongside digital tokens.
While Atkins did not directly respond to the question, he noted that the agency’s Crypto Task Force is working on regulations that are sensible for the industry and supportive of innovation.
Previously, on May 20, Atkins informed lawmakers that the Crypto Task Force would release its initial report in the upcoming months.
Related: SEC charges Unicoin crypto platform over alleged $100 million fraud
The Crypto Task Force was initiated on January 21 by acting SEC chair Mark Uyeda, with the goal of crafting a functional crypto framework for the agency’s implementation.
SEC’s FinHub on the chopping block
Atkins also mentioned that he is seeking Congress’s approval to dissolve the agency’s Strategic Hub for Innovation and Financial Technology, established in 2018 to focus on fintech initiatives.
“Innovation should permeate the entire SEC culture and not be confined to a limited office,” Atkins stated.
“The principles and priorities set forth when it was created are being woven into the very fabric of the SEC.”
Since Gensler’s resignation on January 20, the SEC has adopted a different stance towards crypto, dropping several longstanding enforcement actions against crypto firms.
The SEC staff has also issued guidance regarding the most common crypto staking activities, clarifying that they do not violate securities laws, along with information on how federal securities laws could apply to cryptocurrencies.
Magazine: SEC’s U-turn on crypto leaves key questions unanswered
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