Paul Atkins Confirms SEC’s Shift from Enforcement to Guidance for Crypto Firms

Oversight of digital asset industry participants “will be conducted through notifications and comments, rather than enforcement regulation,” stated SEC Chairman SEC Paul Atkins during Senate hearings.

The official assured members of the financial services subcommittee that the agency will refrain from establishing its rules through the courts.

“The Commission will use existing authorities to set standards,” Atkins noted.

The head of the agency promised to ensure compliance with regulations, particularly in the areas of fraud and manipulation.

The SEC will establish “clear rules” for the issuance, custody, and trading of cryptocurrencies and will prevent law violations by unscrupulous market participants, he added.

Atkins did not directly address the question of supporting bitcoin exchanges listing traditional securities and digital tokens, citing the preparation of rules “that allow for innovation.”

The SEC Chairman’s comments align with his statements following his swearing-in.

At that time, Atkins identified the creation of a clear and understandable regulatory framework for digital assets as his priority. He emphasized his intention to focus on increasing market transparency and enhancing investor protection.

Atkins’ appointment marks a shift in the SEC’s approach. His strategy differs from that of former head Gary Gensler, who often relied on “enforcement regulation.”

In January, then-acting head Mark Uyeda appointed Hester Peirce as the head of the SEC’s “crypto group.” Under her leadership, the agency conducted a series of roundtables with industry representatives.

Since the beginning of the year, the SEC has halted investigations against Binance, Coinbase, Robinhood, Ripple, Kraken, ConsenSys, Cumberland, Nova Labs, Uniswap, and PayPal.

Earlier, the Commission’s corporate finance division outlined the characteristics of stablecoins not classified as securities. Later, the department clarified that staking under certain conditions does not violate the law.

Previously, the SEC ruled out any connection between mining using the Proof-of-Work consensus algorithm and investment contracts.