- According to a new address from new SEC Chair Paul Atkins this week, innovation “has been stifled for the last several years” under the last administration.
- Several crypto projects have seen everything from lawsuits to Wells notices to investigations quietly closed.
- So far, Atkins has clarified that new, sweeping changes are coming for the industry and are already here.
Newly appointed SEC Chair Paul Atkins has openly called out the previous administration for holding back crypto innovation. Atkins spoke at the SEC’s Crypto Task Force roundtable on Friday and openly criticized Gary Gensler for what he calls an “enforcement-first” approach to crypto regulation. So far, Atkins has made it clear that new, sweeping changes are coming for the industry, and they will arrive not a moment too soon.
A New Era for Crypto Regulation
Atkins has wasted no time in setting the tone for his administration as the new chair of the SEC. He spoke from the agency’s headquarters in Washington, stating that innovation in the crypto sector “has been stifled for the last several years.” He even pointed directly at the regulatory uncertainty that plagued the market during the Biden era.
“The current framework in the market badly needs attention,” Atkins pointed out in the opening remarks. His comments came at the SEC’s third crypto roundtable, which is the first major event under his leadership.
Attendees included executives from top digital asset firms like Fidelity Digital Assets, Kraken, Anchorage Digital Bank, BitGo, and Fireblocks, among others. Atkins’s meaning came out loud and clear. The SEC, under new leadership, is moving away from the “regulation by enforcement” era and is instead embracing a system with clearer guidelines.
Crypto Custody Takes Center Stage
One of the roundtable’s main focuses was the issue of crypto custody and how crypto should be securely held on behalf of investors. This is a very important piece of the crypto ecosystem, especially with the lack of clear rules has left many firms in a legal gray area over the last few years. SEC commissioner Hester Pierce, who is affectionately referred to as “Crypto Mom,” noted that different types of custody solutions in the industry would be good for different types of assets.
For example, certain classes of assets require qualified custodians, while others require self-custody solutions like hardware wallets. Without proper guidance, however, firms tend to struggle with compliance, and investors are left open to unnecessary risks.
Atkins acknowledged these issues and indicated that revising these rules (originally proposed under former Chair Gary Gensler) is now a top priority. “The Commission must tackle these issues head-on,” Peirce said. “Otherwise, regulated entities will remain unable to serve their customers.”
Dropping Lawsuits and Ending Hostility
Friday’s event comes just weeks after the SEC officially dropped its high-profile lawsuit against Ripple, after four long years. The decision to end this legal battle is highly symbolic for the crypto community and shows that the SEC is approaching regulation with a friendlier attitude. Pierce has led the SEC’s crypto task force since January and has seen to it that the agency scaled back many of its aggressive moves against the crypto industry.
Several crypto projects have seen everything from lawsuits to Wells notices to investigations quietly closed, as the cloud of uncertainty that has hung over the industry for years lifted. The SEC even issued guidance clarifying that most meme coins do not fall under federal securities laws in February, which removes one of the biggest regulatory threats hanging over many classes of crypto assets.
So far, Atkins, who previously served as an SEC Commissioner during the Bush administration, has clarified that a “rational, fit-for-purpose framework for crypto assets” will take priority with him as chair.
