SEC Chairman Paul Atkins Pledges Clear Crypto Rules in First Major Congressional Address
In his first major address to Congress as Chairman of the U.S. Securities and Exchange Commission (SEC), Paul Atkins outlined the agency’s evolving approach to digital assets and promised a decisive shift away from the controversial “regulation-by-enforcement” model.
Speaking before the Senate Appropriations Subcommittee, Atkins detailed the early work of the SEC’s newly formed crypto task force and emphasized the need to provide the industry with long-awaited regulatory clarity and certainty.
Budget Request and Agency Restructuring
Atkins also endorsed President Donald Trump’s proposed $2.149 billion budget for the SEC in fiscal year 2025. While the number matches previous years’ funding, Atkins said the agency needs $100 million less than requested to maintain current operations.
This budget surplus stems from staff reductions, after 15% of the agency’s workforce accepted voluntary buyouts offered under the Trump administration’s cost-cutting initiative.
Ending Regulation-by-Enforcement
In a notable policy shift, Paul Atkins criticized the SEC’s past reliance on litigation to shape crypto policy, saying:
“Policymaking will be done through notice-and-comment rulemaking, not through regulation-by-enforcement.”
This change marks a clear departure from the tenure of former Chairman Gary Gensler, under whom the SEC pursued multiple high-profile lawsuits against crypto firms for alleged unregistered securities offerings.
Instead, Atkins pledged a return to Congress’s original intent for the Commission — to enforce existing laws against fraud and market manipulation, rather than define new ones through courtroom battles.
Crypto Task Force and Industry Engagement
The SEC’s crypto task force, formed earlier this year under Acting Chair Mark Uyeda and now led by Commissioner Hester Peirce, has already convened four roundtables with industry stakeholders and legal experts.
Key discussion areas include:
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Defining when a crypto asset qualifies as a security
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Tailoring rules for crypto trading platforms
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Regulatory treatment of custody and tokenization
Atkins revealed that the task force has reached a preliminary conclusion: most crypto assets traded on open markets should not be classified as securities.
However, he acknowledged the legal gray area around initial token sales and “investment contract” designations, which remain a priority for further discussion.
Looking ahead, the next task force session will focus on the decentralized finance (DeFi) sector — a rapidly evolving area with significant implications for investor protection and market stability.
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