SEC Chair Shifts Approach to Crypto Regulation
The chair of the US Securities and Exchange Commission (SEC) is steering the agency away from its earlier enforcement-first stance regarding the crypto sector.
In an interview with the Financial Times released on Monday, SEC Chair Paul Atkins stated that the agency is moving away from the aggressive enforcement actions that characterized the tenure of former President Joe Biden and former SEC Chair Gary Gensler.
According to Atkins, US cryptocurrency firms can now expect to receive preliminary notices for technical violations before any enforcement measures are taken by the agency.
“You can’t just suddenly come and bash down their door and say uh-uh, we caught you, you’re doing something and it’s a technical violation,” Atkins explained, mentioning that businesses can anticipate a preliminary notice first.
These remarks signal a significant shift from the enforcement-heavy policy of Gensler, who faced criticism for leading the agency’s crypto approach via regulation by enforcement.
During Gensler’s time in charge, the SEC filed lawsuits against some significant players in the industry, including Ripple Labs in 2020, Terraform Labs in 2022, and cryptocurrency exchanges Binance, Coinbase, and Kraken in 2023. These legal battles incurred billions in costs for the industry.
Reflecting on Gensler’s past enforcement actions, Atkins acknowledged that people “rightly criticised the SEC” in recent years, as these decisions were “not grounded in precedent” or “predictability.”
“It would shoot first and then ask questions later,” Atkins added, indicating that the regulator’s process should allow for a potential six-month period prior to taking enforcement actions against businesses.
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He also distanced himself from Gensler’s earlier assertions that the majority of cryptocurrencies should be classified as securities. Atkins suggested that most tokens do not fall under securities regulations and expressed his commitment to supporting the trading of tokenized versions of stocks and bonds, which would carry the same legal rights as their underlying assets.
Atkins was confirmed as the new SEC chair following a 52–44 vote in the US Senate on April 9, as reported.
Since his confirmation, the SEC has established a Crypto Task Force to engage with the industry on regulatory matters and has abandoned several crypto-related investigations and enforcement actions initiated during Gensler’s leadership.
