SEC's new chair reiterates need for comprehensive crypto regulatory reform, pledges end to "regulation by enforcement"
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SEC's new chair reiterates need for comprehensive crypto regulatory reform, pledges end to "regulation by enforcement"
Atkins believes that "on-chain" assets could transform capital markets in the same way that MP3s revolutionized audio distribution.
Navigating Web3 tides with focused insightsAuthor: Cryptoslate
Translation: Blockchain Knight
SEC Chair Paul Atkins called for a comprehensive modernization of U.S. crypto asset policy, outlining a three-part strategy targeting regulatory reforms for issuance, custody, and trading.
Atkins made these remarks on May 12 during a keynote speech at the latest roundtable of the SEC's Crypto Asset Task Force, which explored tokenization and its potential to upgrade capital markets.
Atkins compared the transition to blockchain-based securities to the digital transformation in the music industry, suggesting that on-chain assets could revolutionize capital markets just as MP3s reshaped audio distribution.
Under Atkins' leadership, the SEC's top priority is creating a "sensible regulatory framework" tailored to digital asset markets, moving away from years of unpredictable enforcement actions that have stifled innovation.
He pledged that policymaking would henceforth proceed through formal channels rather than ad hoc measures, reaffirming his recent statements.
"The SEC has entered a new era," said Atkins.
A Three-Pronged Reform Plan
Atkins laid out an ambitious reform agenda focused on facilitating compliant crypto asset issuance, expanding legitimate custody options, and modernizing trading frameworks.
He noted that only a small number of projects have successfully registered offerings through the SEC’s traditional pathways, citing outdated disclosure forms and legal uncertainty as major obstacles.
To address this, the regulator will consider developing more suitable exemptions, safe harbor rules, and disclosure guidance for natively digital assets. He emphasized that temporary staff guidance is insufficient and that full rules established by the Commission are needed to create durable standards.
On custody, Atkins supports eliminating Staff Accounting Bulletin No. 121, which imposed restrictive accounting treatments for holding crypto assets. He called for broader and clearer definitions of who qualifies as a "qualified custodian" and stated that custody rules should evolve to reflect industry practices such as self-custody solutions and emerging best practices.
Regarding trading, Atkins expressed support for allowing broker-dealers to offer integrated services—covering both crypto and non-crypto assets—on unified platforms. He also raised the possibility of conditional exemptive relief to enable the launch of new products that may not yet meet existing rules.
Securing U.S. Leadership in Crypto
Atkins echoed President Donald Trump’s call for the U.S. to become the "global crypto capital," warning that if the SEC fails to adapt, innovation will move overseas.
He praised Commissioners Mark Uyeda and Hester Peirce, co-chairs of the newly formed Crypto Asset Task Force, which aims to break down internal silos and accelerate the release of guidance across the agency.
In his speech, Atkins emphasized the need to establish rules that both protect investors and support innovation. He stressed that combating fraud remains a top priority, but the SEC’s enforcement approach will return to its original purpose—addressing violations of clearly defined obligations, rather than using enforcement to set policy.
The SEC is expected to continue advancing additional rulemaking, staff guidance, and interagency coordination in the coming months, aiming to position the U.S. as a leader in tokenized financial infrastructure.
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