Charles Esther
The United States Securities and Exchange Commission (SEC) is set to revise its approach to crypto regulation, prioritising transparency and public participation in policy formation.
Chairman Paul Atkins stated on June 3 during his address to the Senate Appropriations Subcommittee on Financial Services that the agency will implement a notice-and-comment rulemaking process.
This marks a significant departure from the controversial method of regulation by enforcement used in previous years.
A New Era for Crypto Oversight
Atkins, a former crypto lobbyist, stressed that the SEC will use its current legal authorities to define standards tailored for the crypto market.
He reaffirmed that establishing a “rational regulatory framework for crypto assets” will be one of the agency’s top priorities.
“Policymaking will be done through notice and comment rulemaking, not through regulation by enforcement,” Atkins stated.
This policy shift is aimed at creating clarity and consistency for market participants.
A Move Away From the Gensler Legacy
Under former chair Gary Gensler, the SEC faced heavy criticism from the crypto community.
Many accused Gensler of using lawsuits and legal actions instead of transparent rulemaking to shape crypto policy.
Atkins made it clear that under his leadership, the SEC would return to Congress’s original intent for the agency — to focus on enforcing existing rules, especially those related to fraud and market manipulation.
Establishing Clear Rules of the Road
The SEC plans to implement clear and defined rules for key aspects of the crypto market, including asset issuance, custody, and trading.
Atkins emphasised that these rules will protect investors and help them distinguish between legitimate projects and fraudulent schemes.
“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 said.
Crypto Task Force in Action
When asked by Democrat Senator Chris Coons if he supported allowing crypto exchanges to handle both digital assets and traditional securities, Atkins refrained from a direct response.
Instead, he highlighted that the SEC’s Crypto Task Force is working on regulations that would promote innovation while ensuring market integrity.
The Crypto Task Force, formed in January 2025 by then-acting chair Mark Uyeda, is tasked with building a practical regulatory structure for the crypto industry.
Atkins mentioned the group is set to release its first comprehensive report within the next few months.
Disbanding FinHub: A Cultural Shift in the SEC
Another key development announced by Atkins is the proposed disbandment of the SEC’s Strategic Hub for Innovation and Financial Technology (FinHub).
This office, launched in 2018, focused on fintech policy, including blockchain and crypto developments.
“Innovation should be ingrained into the culture SEC-wide and not limited to a relatively small office,” Atkins told lawmakers.
He believes the values and goals of FinHub should become embedded throughout the entire agency rather than being siloed.
A More Balanced Regulatory Approach
Since the resignation of Gary Gensler in January, the SEC has signalled a more measured approach to crypto enforcement.
Several long-standing legal actions against crypto firms have been dismissed.
Additionally, the agency has provided more guidance on crypto staking activities and clarified how federal securities laws might apply to the digital asset industry.
These actions indicate a broader shift toward fostering innovation while maintaining investor protection.
With Paul Atkins at the helm, the SEC appears ready to redefine its role in the evolving world of digital finance.
