SEC Announces New Crypto Policy Shift, Aims for Transparency

SEC Chairman Paul Atkins recently addressed the regulatory challenges faced by the cryptocurrency market, acknowledging that it has long been in a gray area for the SEC. Initially, the SEC adopted an "ostrich policy," hoping the crypto industry would fade away. Later, the approach shifted to an enforcement-driven strategy, often characterized by a "shoot first, ask questions later" mentality. This regulatory environment has created a dilemma for market participants, as the underlying message has been "figure it out for yourself," which does not foster trust.

Atkins announced a significant shift in the SEC's approach, directing the Division of Corporation Finance to engage in transparent communication with the public. This open dialogue aims to allow market participants to act more flexibly and allocate capital more effectively. The SEC is now at a new starting point, with the policy division staff beginning to draft rule proposals related to cryptocurrency. Concurrently, the staff is working through departmental-level statements to address existing hurdles.

Atkins expressed his hope that the Commission will permit SEC-registered entities to custody and trade both securities and non-securities assets on a single platform. This move is intended to reduce investor costs and facilitate the entry of non-securities transactions into the federal regulatory environment. In response to the innovation trend and the progress of the crypto working group, the SEC has applied to Congress for a budget reallocation to integrate the "Strategic Hub for Innovation and Financial Technology (FinHub)" function into other parts of the agency.