On Thursday, Securities and Exchange Commission chair Paul Atkins delivered an address signaling a new era for the top regulator. After the SEC spent years combating the blockchain industry through enforcement actions, the newly appointed Atkins announced an initiative dubbed “Project Crypto” that will turn the U.S. into the “crypto capital of the world.”
Atkins’ speech comes just a day after the White House released a 166-page report outlining its own approach to regulating the crypto industry, and just over three months into his tenure leading the top financial regulator. Atkins has repeatedly signaled he plans to take a markedly different approach to crypto regulation than his predecessor, Gary Gensler, who was widely reviled by the industry.
In his Thursday address, Atkins laid out a series of priorities for SEC staff, including drafting “clear and simple rules of the road” for different crypto behavior, including custody and trading, as well as allowing intermediaries like exchanges to become “super-apps” that offer a broad range of services.
“When our regulatory posture is calibrated to meet innovation with thoughtfulness rather than fear, America’s leadership position has only grown stronger,” Atkins said.
The new SEC
Atkins’ speech on Thursday reflected the most explicit overview to date of the agency’s new approach. It comes as crypto dominates the headlines, with Bitcoin reaching record highs and Fortune 500 companies exploring blockchain projects.
In his address, Atkins detailed the top initiatives for his staff: bringing crypto activity back to the U.S. after many companies fled under Gensler, modernizing the SEC’s custody requirements for companies that want to hold digital assets, and allowing firms to experiment with new types of on-chain technology, such as “tokenizing” equities, or creating blockchain versions of assets like stocks and money market funds.
“Under my leadership, the Commission will encourage our nation’s builders rather than constrain them with red tape and one-size-fits-all rules,” Atkins said.
The challenge for the new chair will be establishing its own rules as Congress continues to debate broad legislation that would regulate the market structure of digital assets, which governs how cryptocurrencies can be issued and managed. While the House passed its own version of a bill, the Senate has yet to signal its own approach.
A sharp break from the Gensler era
Under Gensler, the SEC cracked down on top crypto companies such as Coinbase and Gemini, arguing that they were operating outside of long-established securities laws and presenting threats to consumers—a reaction, in part, to the high-profile collapses of projects such as Sam Bankman-Fried’s FTX in 2022.
Aggrieved by Gensler’s campaign, the crypto industry fought back by raising hundreds of millions of dollars to back pro-blockchain candidates in the 2024 election, including Donald Trump, who embraced the sector on the campaign trail and was swept into office promising to staff his administration with digital asset-friendly officials. Those included Atkins, a former SEC commissioner who served as an advisor to crypto projects after leaving the agency in 2008.
Even before Atkins was sworn in as agency head in April, the SEC began to roll back Gensler’s actions, with the reversal led by Commissioner Hester Peirce, who has adopted the moniker “crypto mom” for her open stance toward the industry. That included dropping a series of lawsuits against companies such as Coinbase and launching an agency-wide effort to engage in new rulemaking.
Gensler sympathizers in D.C. are likely to raise alarm bells that a lax approach to crypto will usher in a new era of fraud and collapses like FTX. “As happened when [Atkins] was an SEC Commissioner from 2002-2008, Wall Street’s megafirms and politically favored companies will be protected while investors will be left to protect themselves,” said Dennis Kelleher, the CEO of the consumer advocacy organization Better Markets, when Atkins was sworn in.
