A new phase in crypto regulation is being ushered in, as the SEC signals a shift away from aggressive enforcement tactics in favor of establishing clear and transparent rules—an approach expected to unlock long-anticipated momentum for blockchain innovation.
SEC Chair Paul Atkins Shifts Crypto Focus to Clarity, Not Crackdowns
A clear message was delivered by U.S. Securities and Exchange Commission (SEC) Chairman Paul Atkins to lawmakers during his May 20 testimony before the House Appropriations Subcommittee on Financial Services and General Government: a new course is being taken by the agency in its approach to crypto. Only weeks into his leadership, an overhaul in the SEC’s handling of digital asset markets was outlined by Atkins, with a pledge made to ensure greater clarity and fairness for both entrepreneurs and investors.
At the core of Atkins’ remarks was a move away from relying on enforcement actions as the primary means of shaping crypto policy. It was emphasized by him that regulations would now be established through appropriate procedural channels. Atkins stated:
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.
It was further added by the SEC Chair that “clear rules of the road are necessary for investor protection against fraud—not the least to help them identify scams that do not comport with the law.” He emphasized that the role of enforcement should be limited to upholding pre-existing obligations, rather than creating new ones.
The SEC’s Crypto Task Force, established earlier this year by Commissioners Mark Uyeda and Hester Peirce, was commended by Atkins as a demonstration of effective internal collaboration contributing to long-overdue clarity in the crypto sector. The Task Force has been assigned the responsibility of developing a consistent regulatory framework for crypto markets that balances investor protection with support for innovation. As explained by the SEC Chair:
The task force has held four roundtables so far on further defining security status, tailoring regulation for crypto trading, custody considerations, and tokenization. I look forward to the input from industry and additional public feedback during the next roundtable on decentralized finance.
Alongside policy development, structural reforms within the SEC were also proposed by Atkins to embed innovation across all divisions. This includes plans to dissolve the Strategic Hub for Innovation and Financial Technology. It was argued by him that the responsibility for forward-thinking policies should not rest with a single specialized office but should instead be integrated into the agency’s overall mission. His vision reflects a significant philosophical and procedural transformation aimed at balancing strong investor protections with a regulatory environment that encourages responsible blockchain innovation.
