SEC Chair Atkins reiterates need to overhaul crypto rules, pledges to end ‘regulation by enforcement’

Securities and Exchange Commission Chairman Paul Atkins called for a sweeping modernization of US crypto asset policy, outlining a three-part strategy to overhaul regulations for issuance, custody, and trading.

He made the statement during his keynote address at the SEC Crypto Task Force’s latest roundtable on May 12, which covered tokenization and its potential to upgrade capital markets.

Atkins likened the shift to blockchain-based securities to the music industry’s digital transformation, arguing that “on-chain” assets could revolutionize capital markets just as MP3s reshaped audio distribution.

The SEC’s top priority under Atkins will be crafting a “rational regulatory framework” tailored to digital asset markets, breaking away from years of unpredictable enforcement that discouraged innovation.

He promised that policymaking would now occur through formal channels rather than ad-hoc actions, reaffirming his recent statements.

According to Atkins:

“It is a new day at the SEC.”

Three-pronged reform plan

Atkins laid out an ambitious reform agenda focused on enabling compliant crypto asset issuance, expanding legal custody options, and modernizing trading frameworks.

He noted that only a handful of projects have successfully registered offerings through traditional SEC pathways, pointing to outdated disclosure forms and legal uncertainty as major barriers.

To address this, the regulator will consider exemptions, safe harbors, and disclosure guidance more suitable for digital-native assets. He emphasized that interim staff guidance remains temporary, and full Commission rulemaking is needed to establish enduring standards.

On custody, Atkins endorsed the rollback of Staff Accounting Bulletin No. 121, which had imposed restrictive treatment of crypto holdings. He called for broader clarity on what qualifies as a “qualified custodian” and said custody rules should evolve to reflect self-custody solutions and emerging best practices in the industry.

For trading, Atkins voiced support for allowing broker-dealers to offer integrated services, including crypto and non-crypto assets, under unified platforms. He also raised the possibility of conditional exemptive relief to allow novel products that may not yet fit within existing rules.

Cementing US leadership

Echoing President Donald Trump’s call to make America the “crypto capital of the planet,” Atkins warned that if the SEC fails to adapt, innovation will migrate offshore.

He praised Commissioners Mark Uyeda and Hester Peirce for co-leading the newly formed Crypto Task Force, which aims to break down internal siloes and fast-track guidance across the agency.

Throughout the address, Atkins highlighted the need for rules that protect investors while supporting innovation. He emphasized that fraud enforcement remains a priority, but the SEC’s approach will return to its “original intent” to police violations of established obligations rather than making policy through enforcement.

The SEC is expected to proceed with additional rulemaking, staff guidance, and interagency coordination in the coming months as it seeks to establish the US as a leader in tokenized financial infrastructure.

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