Can the SEC under Paul Atkins reshape the US crypto market?

Author: Jason Jiang, Senior Researcher at OKG Research

On April 22, 2025, Beijing time, Paul Atkins was officially sworn in as the 34th Chairman of the U.S. Securities and Exchange Commission (SEC). This "free market" regulator nominated by President Trump and confirmed by the Senate with 52 votes to 44 votes, is different from his predecessor Gary Gensler's law enforcement-oriented regulatory approach during his tenure. As soon as he took office, he made it clear that building a clear and open digital asset regulatory framework would be a "top priority."

During the Gensler era, the US SEC launched a large-scale law enforcement action against the encryption industry, treating almost all tokens as securities, leaving entrepreneurs, investment institutions and trading platforms in uncertainty and risk for a long time. Against the backdrop of this high-pressure supervision and ambiguous policies, Atkins' appointment was seen by the industry as a "restart moment" for US encryption regulation.

From a traditional regulator to a "crypto veteran"

Paul Atkins is a typical "Washington-Wall Street shuttler". He graduated from Wofford College and Vanderbilt University Law School. In his early years, he worked at Davis Polk, a top Wall Street law firm, engaged in securities issuance and mergers and acquisitions, and accumulated international experience working in Paris. He joined the SEC in the early 1990s and served as a senior advisor to two former chairmen, focusing on issues such as corporate governance and market structure reform.

In 2002, Atkins was appointed as a commissioner of the SEC by then-President George W. Bush. Before leaving office in 2008, he was known for promoting transparent supervision and opposing bureaucratic expansion, and was one of the representatives of the free market regulatory concept in the United States. In 2009, he founded Patomak Global Partners, a compliance consulting agency, to provide compliance strategy services to financial institutions and crypto companies.

In the process of founding Patomak, Atkins established deep connections with the crypto industry. Atkins served as co-chair of the "Token Alliance" under the U.S. Digital Chamber of Commerce, leading the development of best practices for token issuance and crypto platforms. He has also provided strategic consulting to well-known crypto companies such as Securitize and Anchorage Digital, and invested in the crypto asset fund Off The Chain Capital. Financial disclosures show that the scale of his family's crypto-related assets is as high as millions of dollars.

These experiences make Atkins one of the few representatives among traditional regulators who has both theoretical knowledge and practical experience in the crypto industry. However, Atkins' crypto background has also caused controversy. Before the collapse of FTX, Patomak provided it with compliance advice services, and this experience became one of the controversial points in its nomination process. Despite this, the Senate majority party ultimately gave its support, which is not only a recognition of its professional ability, but also reflects the loosening of crypto regulatory attitudes in the U.S. political atmosphere.

Regulation should not be the enemy of innovation

Different from the regulatory path of "litigation governance industry" during Gensler's period, Atkins made it clear at the hearing and on his first day in office that the SEC's mission should shift from "defining rules through law enforcement" to "guiding compliance through rules."

He believes that regulation cannot be at the expense of suppressing innovation, nor can it allow the market to wander in the legal gray area for a long time. "Regulation should not be the enemy of innovation," but should provide "rational, clear and enforceable compliance paths," which is his first key signal to the entire crypto industry.

Atkins criticized his predecessor's practice of "one-size-fits-all treatment of cryptocurrencies as securities," which led the market into a vicious cycle of "being sued first and then finding rules." In contrast, he tends to build a more flexible and adaptable regulatory classification system based on dimensions such as token functions and degree of decentralization, and points out that "the United States should not lose its competitive advantage in the Web3 era due to regulatory uncertainty". This is highly consistent with the calls made by the crypto community, developers and even some institutional investors for many years.

Since the Senate voted to confirm Atkins as chairman on April 9, a series of actions by the SEC have made the crypto industry clearly feel the change in regulatory direction, and some industry insiders have dubbed the regulator as a "crypto dad":

1, start a dialogue with the crypto industry. In order to fill the regulatory gap and reach an industry consensus as soon as possible, the SEC's Cryptocurrency Working Group plans to hold four public roundtable meetings from April to June this year, covering key issues such as exchange supervision, custody regulations, DeFi compliance and asset tokenization, and inviting industry representatives, consumer organizations and policy researchers to discuss regulatory paths. This is the first time in the history of the SEC that a systematic policy consultation mechanism has been established on crypto issues, showing that the SEC under Atkins' leadership hopes to listen to the voice of the industry and replace confrontation with cooperation, and adjust policy priorities in a timely manner.

The first roundtable topic on April 11 was "Tailoring Regulation for Crypto Transactions", which discussed how to adjust the rules under the existing securities law framework to adapt to crypto exchanges.

2Crypto litigation cases were settled or withdrawn on a large scale. After Atkins took office, the SEC's attitude towards existing crypto litigation cases has softened significantly. On April 11, the SEC reached a long-term litigation settlement agreement with Ripple, reducing the fine to US$50 million, and XRP was not clearly defined as a security. At the same time, the lawsuits of multiple projects such as Nova Labs were directly withdrawn, which was called "regulatory amnesty" in the industry. This "correction" gesture sends a clear signal: the SEC will retroactively amend the abuse of crypto enforcement lawsuits during the previous term, hoping to resolve the remaining disputes through negotiations and provide policy breathing space for the industry.

3The initial formation of crypto disclosure standards. Also on April 11, the SEC's Corporate Finance Department issued non-binding information disclosure guidelines on the issuance of crypto tokens, covering project architecture, token functions, governance design, development progress and other content. This is the first time that the SEC has attempted to provide an "expected disclosure list" for crypto projects, marking that its regulatory logic has shifted from "ex post enforcement" to "ex ante guidance." "Crypto Mom" ​​Hester Peirce commented that this reflects the SEC's willingness to "step down to guide" under the new chairman, rather than letting the industry grope forward on the edge of danger.

These turning measures show that the SEC under Atkins' leadership is moving from the past "high-pressure control" to "transparent co-governance". Rather than saying that this is a relaxation of supervision, it is better to say that it is a return to rational supervision, returning to the original point of serving the market, protecting investors and encouraging innovation.

3major issues will becomeAtkins's priorities for the new crypto policy

After releasing initial friendly signals, the industry generally pays attention to the next key policy direction of the SEC under the leadership of Atkins. The current market generally focuses on three major directions:

1Accelerate the legislation of stablecoins. Trump has publicly supported the launch of standardized US dollar stablecoins many times to increase the demand for US Treasury bonds and consolidate the dominance of the US dollar in the digital age. Atkins has expressed support for the GENIUS Act proposed by Senator Bill Hagerty, which establishes a basic framework for stablecoins, including licenses, reserves, and information disclosure, and recommends providing state-level exemption channels for small and medium-sized projects. During his tenure, the SEC may gradually withdraw from direct intervention in "non-securities stablecoins" (such as USDC) and hand over its regulatory focus to banking regulators or legislatures. This will remove key obstacles for the legal and compliant large-scale use of stablecoins, and will also help promote the construction of the US digital dollar ecosystem.

2The registration path for compliant exchanges is expected to be opened. In the past two years, exchanges such as Coinbase have faced SEC lawsuits for "unregistered operation of securities trading platforms." Atkins advocates setting up a special compliance framework for such platforms, such as allowing registration as an "alternative trading system" (ATS) or a "crypto-specific broker."

According to The Block, citing SEC insiders, multiple withdrawal actions are currently being prepared, and the Coinbase case may also be "concluded without a fight", opening up space for subsequent compliance paths. More importantly, the SEC may no longer try to unify supervision, but coordinate with institutions such as the CFTC and FinCEN to develop a multi-institutional regulatory framework with "clear division of responsibilities" to provide a more predictable environment for exchanges and their users.

3The token identification standard will be reshaped. One of the most thorny issues in the current crypto market is what kind of tokens are securities and what kind are commodities or non-regulated assets. In the past, the SEC widely applied the Howey test to identify tokens as securities, while Atkins preferred to combine the token function (practicality vs. investment) and the degree of decentralization for classification and evaluation. He supports the "safe harbor proposal" proposed by Commissioner Hester Peirce, which is to give startups a three-year grace period to complete the construction of a distributed network without worrying about the SEC taking legal action. This means that the dual-track system of "start-up exemption + long-term compliance" may take shape, promoting the re-activation of the project's coin issuance and financing ecology. At the same time, Atkins supports the principle of "disclosure upon issuance", that is, as long as the token project provides complete information disclosure at the time of issuance and has a transparent governance structure, it can operate within the compliance framework. This may greatly ease the compliance pressure on the project party and attract a new wave of token financing projects to return to the US market.

In addition, the SEC's newly established internal research group is re-evaluating the attributes of mainstream public chain assets. Among them, XRP, SOL and other tokens with a wide application base, if excluded from securities recognition, will open up more varieties for crypto ETFs. In fact, on Atkins' first day in office (April 10), the SEC quickly approved the option trading of the Ethereum spot ETF, which provided investors with more channels for participation and released a signal of support for the financialization of crypto assets.

Conclusion

The appointment of Paul Atkins represents that the crypto industry has entered a new regulatory cycle in the United States. If these key links, such as stablecoin compliance channels, exchange registration systems, and legal recognition of tokens, can be broken during his term, they will reshape the United States' position in the global crypto governance system. More importantly, the change in regulatory logic will release a stronger institutional signal: it is not that there is less regulation, but that the regulation is clearer, more consultative, and more constructive.

For the crypto industry, this is a hard-won respite, and it is also a restart that requires more rationality and self-discipline. But Atkins is not a "laissez-faire". He reiterated in many speeches that the SEC will continue to crack down on illegal activities such as fraud, insider trading, and market manipulation; the real change is to let the industry know "where the road to compliance is."