SEC Chair Atkins Emphasizes the Importance of Overhauling Crypto Regulations, Commits to Moving Away from ‘Regulation by Enforcement’
Paul Atkins, the Chairman of the Securities and Exchange Commission, has called for a comprehensive modernization of U.S. crypto asset regulations, outlining a three-part strategy aimed at reforming policies for issuance, custody, and trading.
This announcement was made during his keynote address at the SEC Crypto Task Force’s recent roundtable on May 12, which focused on tokenization and its potential to enhance capital markets.
Atkins compared the transition to blockchain-based securities to the digital transformation of the music industry, asserting that “on-chain” assets could revolutionize capital markets just as MP3s transformed audio distribution.
Under Atkins’ leadership, the SEC’s top priority will be to create a “rational regulatory framework” designed specifically for digital asset markets, moving away from years of inconsistent enforcement that stifled innovation.
He assured that policy development would now take place through formal processes rather than informal actions, reiterating his earlier statements.
Atkins remarked:
“It is a new day at the SEC.”
Three-pronged reform strategy
Atkins presented an ambitious reform agenda aimed at facilitating compliant crypto asset issuance, broadening legal custody options, and modernizing trading infrastructures.
He highlighted that only a small number of projects have registered offerings through traditional SEC methods, citing outdated disclosure forms and legal ambiguities as significant obstacles.
To tackle these issues, the SEC will evaluate exemptions, safe harbors, and disclosure guidance that align better with digital-native assets. Atkins emphasized that interim staff guidance is temporary and that comprehensive rulemaking is essential for establishing lasting standards.
Regarding custody, Atkins supported the repeal of Staff Accounting Bulletin No. 121, which had restrictive implications for crypto holdings. He advocated for clearer definitions of what constitutes a “qualified custodian” and noted that custody rules should adjust to accommodate self-custody solutions and emerging best practices within the industry.
On trading, Atkins expressed support for enabling broker-dealers to provide integrated services, encompassing both crypto and non-crypto assets on unified platforms. He also proposed the potential for conditional exemptive relief for innovative products that do not yet conform to existing regulations.
Securing U.S. leadership
Reiterating former President Donald Trump’s vision of making America the “crypto capital of the planet,” Atkins cautioned that failure to adapt could result in the migration of innovation overseas.
He commended Commissioners Mark Uyeda and Hester Peirce for co-leading the newly established Crypto Task Force, which aims to dismantle internal barriers and expedite guidance throughout the agency.
Throughout his address, Atkins underlined the necessity of regulations that safeguard investors while fostering innovation. He stressed that fraud enforcement will remain a key focus, but the SEC’s strategy will revert to its “original intent” of policing violations of existing obligations rather than establishing policies through enforcement actions.
The SEC is anticipated to move forward with additional rulemaking, staff guidance, and interagency coordination in the upcoming months as it strives to position the U.S. as a leader in tokenized financial infrastructure.
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