Main Points:
- SEC Chair Paul Atkins emphasizes adaptation to emerging crypto technologies.
- Atkins directs staff to draft tailored crypto rule proposals and dismantle unnecessary barriers.
- The SEC has paused or withdrawn enforcement actions and issued memecoin and security token guidance.
- A shift from the previous “regulation by enforcement” model toward rulemaking and interpretive guidance.
- Ongoing Congressional efforts aim to delineate SEC and CFTC oversight of digital assets.
- Upcoming SEC-hosted DeFi roundtable on June 9 to discuss decentralized finance regulation.
A New Era for the Crypto Industry
Since his confirmation in April 2025, SEC Chair Paul Atkins has proclaimed that the cryptocurrency sector is entering a “new day” under his leadership. Speaking at the SEC Speaks conference on May 19, Atkins stated that while the Commission will continue upholding its core principles, it must also “adapt to and accommodate new developments” in blockchain and digital asset technology. He asserted that the SEC’s mission should focus on fostering innovation rather than impeding it, signaling a departure from the more stringent enforcement posture of the previous administration.
Atkins acknowledged that the crypto market had “languished in SEC limbo” for years, noting that unnecessary regulatory hurdles have stifled growth and innovation. To address this, he has instructed policy staff across the agency to draft formal rule proposals for crypto assets, aiming to replace inconsistent staff guidance with clear, commission-approved regulations. These proposals are expected to cover the issuance, custody, and trading of digital tokens, providing market participants with definitive rules of the road.
This renewed focus on rulemaking reflects the SEC’s broader strategic shift under Atkins. Rather than relying on ad hoc enforcement actions, the agency plans to utilize exemptions, interpretive guidance, and formal rulemaking to set “fit-for-purpose” standards for digital assets. By doing so, the SEC aims to enhance investor protection through transparency and legal certainty, reducing the risk of fraud and misconduct while promoting fair market access.
Staff-Level Initiatives to Remove Barriers
Early in his tenure, Chair Atkins directed the SEC’s various divisions to systematically identify and eliminate unnecessary regulatory barriers facing the crypto industry. According to his remarks, staff across policy, trading and markets, and enforcement have been tasked with reviewing existing guidance and rescinding any interpretations that have inhibited regulated entities from engaging with crypto. This effort mirrors the Commission’s withdrawal of several high-profile investigations and enforcement actions against leading crypto firms such as Coinbase and Kraken in recent months.
At the staff level, the SEC’s Crypto Assets and Cyber Unit has also been collaborating with other federal agencies and Congressional staff to develop a coherent legislative and regulatory framework. Technical assistance provided by SEC personnel is informing ongoing House and Senate bills aimed at clarifying the dividing line between securities and commodities regulations. This interagency coordination underscores the SEC’s commitment to a unified approach, avoiding regulatory arbitrage and ensuring consistent oversight across the financial ecosystem.
Moreover, Atkins has emphasized better resource allocation within the agency. Under his direction, certain staff have been reassigned from routine administrative tasks to focus on rule drafting and stakeholder engagement. By reallocating talent toward forward-looking policy work, the SEC seeks to accelerate the development of much-needed crypto regulations while maintaining robust enforcement against genuine misconduct.
Moving Beyond “Regulation by Enforcement”
One of the hallmarks of the SEC’s previous approach under former Chair Gary Gensler was its reliance on enforcement actions to define policy, often leaving market participants uncertain about compliance requirements. Chair Atkins has explicitly rejected this “shoot-first-and-ask-questions-later” paradigm, calling instead for a “rational regulatory framework” built through transparent rulemaking and interpretive guidance.
In his May 19 speech, Atkins likened the transition from enforcement-centric regulation to rulemaking to the music industry’s shift from vinyl to digital formats—arguing that a deliberate, standards-based approach is essential to unlock blockchain’s full potential for capital markets innovation. He stressed that clear rules not only protect investors from fraud but also empower legitimate market actors to innovate, ultimately enhancing liquidity and market efficiency.
This philosophical shift has already yielded practical changes: SEC staff have rescinded prior guidance that discouraged banks and broker-dealers from providing custody or other services to crypto firms. By formalizing these rescissions into rule proposals and interpretive bulletins, the SEC intends to provide industry participants with uniform, legally binding directives rather than disparate memos or speeches.
Congressional Collaboration and Legislative Developments
Chair Atkins’s remarks came amid active Congressional debates on broader crypto regulation. The House Financial Services Committee is advancing a bill to clarify the boundaries between the SEC and the Commodity Futures Trading Commission (CFTC) regarding digital assets, while separate legislation in the Senate seeks to address stablecoin oversight and consumer protections .
Atkins has publicly welcomed Congressional engagement, noting that a hybrid legislative-regulatory approach is essential for comprehensive, durable policy. He pointed out that while the SEC has broad authority under existing securities laws to regulate tokenized assets, only Congress can legislate structural reforms—such as adjusting accredited investor criteria or creating carve-outs for DeFi protocols. Consequently, SEC staff are providing technical input to Capitol Hill, ensuring that forthcoming statutes align with the agency’s developing rulebook and market realities.
Moreover, the SEC has tailored its latest staff roundtables and public comment solicitations to solicit feedback on key legislative drafts. By harmonizing rule proposals with pending bills, the agency aims to reduce regulatory fragmentation and minimize implementation delays once Congress passes new laws.
Focus on Decentralized Finance: The June 9 Roundtable
Looking ahead, the SEC will host a dedicated roundtable on decentralized finance (DeFi) on June 9, convening industry leaders, academics, and other regulators to discuss the unique risks and opportunities of permissionless protocols. Topics slated for discussion include automated market maker (AMM) governance, smart contract audits, on-chain transaction monitoring, and the treatment of algorithmic stablecoins.
Chair Atkins sees DeFi as a proving ground for the SEC’s new “fit-for-purpose” regulatory philosophy. He believes that by directly engaging with protocol developers and ecosystem stakeholders, the agency can craft nuanced guidelines that account for the technical nuances of decentralized platforms while maintaining core investor protections.
The June 9 event will also serve as a launchpad for initial rule drafts on DeFi-specific topics, such as standards for decentralized governance disclosures and frameworks for token classification based on functionality. By iteratively refining these proposals in collaboration with the community, the SEC seeks to achieve a pragmatic balance between innovation and investor safety.
Implications for Investors and Blockchain Practitioners
For investors seeking new crypto assets and revenue sources, the Atkins-led SEC promises a more navigable and transparent regulatory environment. Clear issuance guidelines and custody rules will reduce legal uncertainty, potentially lowering compliance costs for token issuers and unlocking broader participation in token offerings.
Blockchain practitioners, including wallet developers and custodians, should anticipate forthcoming standards for secure asset storage and reporting. By codifying best practices for custody, the SEC aims to curb counterparty risk and prevent high-profile security breaches that have plagued the industry.
Moreover, the push for a unified regulatory framework across securities and commodities markets could enable new “super-app” models—platforms offering both security tokens and non-security digital assets under one roof. Such integrated solutions may drive user adoption by simplifying compliance checks and providing seamless on-chain trading experiences.
Conclusion
Paul Atkins’s first weeks at the helm of the SEC have signaled a decisive pivot away from enforcement-driven regulation toward proactive rulemaking, collaboration with Congress, and targeted engagement with the crypto ecosystem. By instructing staff to dismantle outdated barriers, rescind inhibitive guidance, and draft clear regulations for token issuance, custody, and trading, Atkins is laying the groundwork for a more predictable and innovation-friendly environment. As legislative reforms progress and the June 9 DeFi roundtable approaches, market participants can expect a series of formal rule proposals designed to balance investor protection with the practical realities of blockchain technology. For those seeking new crypto assets, revenue opportunities, and real-world blockchain applications, the SEC’s evolving roadmap under Chair Atkins offers both challenges and opportunities—and, most importantly, clarity.
