SEC's New Chairman Calls for Crypto Regulatory Overhaul

Paul Atkins, the newly appointed Chairman of the Securities and Exchange Commission (SEC), has called for a significant overhaul of the agency’s regulatory framework for cryptocurrencies. Atkins, who was sworn in earlier this week, emphasized that the current regulatory environment has stifled innovation due to outdated rules and an enforcement-heavy approach.

Speaking at the SEC’s third crypto task force roundtable in Washington, D.C., Atkins highlighted the urgent need for a “rational, fit-for-purpose framework” that can foster responsible innovation while protecting investors. He criticized the previous leadership under former Chair Gary Gensler, who pursued an aggressive “regulation by enforcement” strategy, filing lawsuits against major crypto firms such as Coinbase and Binance.

Under Gensler’s tenure, the SEC launched several high-profile lawsuits against digital asset firms, arguing that many tokens qualified as unregistered securities. However, under interim chair Mark Uyeda, the agency began to roll back some of these enforcement actions. Atkins indicated that the SEC would continue to gather insights through a series of roundtables organized by its crypto task force to develop a more coherent regulatory framework.

The ongoing “Know Your Custodian” roundtable is the third of five planned sessions focused on shaping crypto custody guidelines and investor protections. Atkins, who previously served as a commissioner from 2002 to 2008, is known for his deregulatory philosophy and pro-crypto stance. He aims to facilitate capital formation, maintain fair and orderly markets, and protect investors while ensuring the US remains a leading destination for investment and entrepreneurship.

Atkins pledged to work with Congress, fellow commissioners, industry participants, and the administration to draft clear and workable rules for the digital asset sector. He stressed that entrepreneurs building blockchain solutions deserve clear regulatory guidelines, as market ambiguity hinders economic growth and innovation. The SEC’s crypto roundtables, led by Commissioner Hester Peirce, are intended to gather industry insights to inform future policymaking.

During the April 25 session, participants discussed crypto custody issues and whether existing rules under the Exchange Act, the Investment Advisers Act, or the Investment Company Act need to be revised to accommodate blockchain technology’s unique features. Atkins praised Peirce for her advocacy for common-sense crypto policy, calling her the right person to lead the effort in creating a comprehensive regulatory framework for the industry.