The new SEC chairman takes office, marking a significant turning point in U.S. encryption regulation.

The U.S. SEC Welcomes New Chairman, Encryption Regulation Enters a New Phase

On April 22, 2025, Paul Atkins officially took office as the 34th chairman of the U.S. Securities and Exchange Commission (SEC). This "free market" regulator, nominated by Trump and confirmed by the Senate with a vote of 52 to 44, made it clear upon taking office that building a clear and open regulatory framework for digital assets would be the "top priority," unlike his predecessor Gary Gensler.

During the Gensler era, the SEC launched a large-scale enforcement action against the encryption industry, treating almost all tokens as securities, leaving entrepreneurs, investment institutions, and trading platforms in a prolonged state of uncertainty and risk. Against this backdrop of regulatory pressure and policy ambiguity, Atkins's appointment is seen by the industry as a "reboot moment" for U.S. encryption regulation.

From Traditional Regulators to "Encryption Veterans"

Paul Atkins is a typical "Washington-Wall Street shuttle". He graduated from Wofford College and Vanderbilt University Law School, and early in his career worked at top law firms on Wall Street, engaging in securities issuance and mergers and acquisitions, while also gaining international experience working in Paris. He joined the SEC in the early 1990s and served as a senior advisor to two former chairs, focusing on issues such as corporate governance and market structure reform.

In 2002, Atkins was appointed as an SEC commissioner by then-President George W. Bush. Before leaving office in 2008, he was known for promoting transparent regulation and opposing bureaucratic expansion, making him one of the representatives of the American free market regulatory concept. In 2009, he founded a compliance consulting firm that provides compliance strategy services for financial institutions and encryption companies.

In the process of founding a consulting firm, Atkins established deep connections with the encryption industry. Atkins serves as the co-chair of the "Token Alliance" under the U.S. Chamber of Digital Commerce, leading the development of best practices for token issuance and encryption platforms. He has also provided strategic consulting for well-known encryption companies and invested in encryption asset funds. Financial disclosures indicate that his family's encryption-related asset scale reaches several million dollars.

These experiences have made Atkins one of the few representatives among traditional regulators who has both theoretical knowledge and practical experience in the encryption industry. Although his encryption background has sparked controversy, the Senate majority party ultimately gave their support, which not only recognizes his professional abilities but also reflects the loosening attitude towards encryption regulation in the American political atmosphere.

Regulation should not become the enemy of innovation

Unlike the regulatory path of "litigation governance industry" during the Gensler era, Atkins clearly stated at the hearing and on his first day in office that the SEC's mission should shift from "defining rules through enforcement" to "guiding compliance through rules."

He believes that regulation should not come at the expense of suppressing innovation, nor should it allow the market to wander in a legal gray area for a long time. "Regulation should not become the enemy of innovation," but should provide a "rational, clear, and enforceable compliance path," which is the first key signal he has sent to the entire encryption industry.

Atkins criticized the previous administration's "one-size-fits-all approach to treating encryption currencies as securities," which has led the market into a "cycle of being sued first and finding rules later." In contrast, he favors building a more flexible and adaptive regulatory classification system based on dimensions such as token functionality and degree of decentralization, and pointed out that "the United States should not lose its competitive edge in the Web3 era due to regulatory uncertainty." This aligns closely with the calls from the encryption community, developers, and even some institutional investors over the years.

Since the Senate voted to confirm Atkins as chair on April 9, a series of actions by the SEC has made the encryption industry clearly feel the shift in regulatory direction:

  1. Initiating a dialogue with the encryption industry. The SEC's cryptocurrency working group plans to hold four public roundtable meetings from April to June this year, covering key topics such as exchange regulation, custody standards, DeFi compliance, and asset tokenization, inviting industry representatives, consumer organizations, and policy researchers to discuss regulatory pathways. This is the first time in SEC history that a systematic policy consultation mechanism has been established on encryption issues, demonstrating the SEC's desire under Atkins' leadership to adjust policy priorities in a timely manner by listening to the industry's voice and replacing "confrontation with cooperation."

  2. Large-scale settlements or withdrawals in encryption litigation cases. After Atkins took office, the SEC's attitude towards existing encryption litigation cases has clearly softened. On April 11, the SEC reached a long-term settlement agreement with a certain project, reducing the fine amount to $50 million, and its token was not explicitly defined as a security. At the same time, lawsuits against multiple projects were directly withdrawn, which the industry referred to as the "regulatory amnesty wave." This "correction" posture sends a clear signal: the SEC will retroactively correct the excessive enforcement of encryption lawsuits during the previous administration, hoping to resolve outstanding disputes through negotiation and provide the industry with a policy breathing space.

  3. The encryption disclosure standards are taking shape. The SEC's Division of Corporate Finance has released non-binding guidance on information disclosure regarding the issuance of encryption tokens, covering project structure, token functions, governance design, development progress, and more. This is the SEC's first attempt to provide a "checklist of expected disclosures" for encryption projects, marking a shift in its regulatory logic from "post-enforcement" to "pre-guidance."

These directional measures indicate that the SEC, led by Atkins, is moving from a past of "high-pressure regulation" to "transparent co-governance." Rather than viewing this as regulatory loosening, it is more accurate to say that regulatory rationality is returning, going back to the original point of serving the market, protecting investors, and encouraging innovation.

Three major topics will become the priorities of Atkins encryption new policy.

After releasing initial friendly signals, the industry is paying close attention to the upcoming key policy direction of the SEC under the leadership of Atkins. The current market is generally focused on three main directions:

  1. Accelerate the legislative work on stablecoins. Trump has repeatedly publicly supported the introduction of regulated US dollar stablecoins to increase demand for US Treasury bonds and consolidate the dominance of the dollar in the digital age. Atkins has expressed support for the "GENIUS Act" proposed by Senator Bill Hagerty, which establishes basic frameworks for stablecoin licensing, reserves, and information disclosure, and suggests providing state-level exemption channels for small and medium-sized projects. The SEC may gradually withdraw from direct intervention in "non-security stablecoins" during its tenure, transferring its regulatory focus to banking regulatory agencies or legislative bodies for unified oversight. This will eliminate key obstacles for the large-scale legal and compliant use of stablecoins and also help promote the construction of the US digital dollar ecosystem.

  2. The registration path for compliant exchanges is expected to be opened up. In the past two years, some exchanges have faced lawsuits from the SEC due to "operating a securities trading platform without registration." Atkins advocates for establishing a dedicated compliance framework for such platforms, such as allowing registration as an "Alternative Trading System" (ATS) or "encryption-specific broker-dealer." According to media reports citing SEC insiders, multiple motions to dismiss are currently in preparation, and a large exchange's case may also "conclude without a fight," opening up space for subsequent compliance pathways. More importantly, the SEC may no longer attempt to unify regulation, but instead coordinate with agencies like the CFTC and FinCEN to develop a multi-agency regulatory framework with "clear delineation of responsibilities," providing a more predictable environment for exchanges and their users.

  3. The criteria for token classification will be reshaped. One of the most challenging issues in the current encryption market is determining which tokens qualify as securities and which are classified as commodities or non-regulated assets. In the past, the SEC widely applied the Howey test to classify tokens as securities, while Atkins is more inclined to evaluate classification based on token functionality (utility vs. investment) and the degree of decentralization. He supports the "safe harbor proposal" put forward by Commissioner Hester Peirce, which would grant startups a three-year grace period to complete the construction of distributed networks without the fear of legal action from the SEC. This means that a dual-track system of "startup exemption + long-term compliance" may take shape, revitalizing the token issuance and financing ecosystem. Meanwhile, Atkins supports the principle of "issue and disclose," meaning that as long as a token project provides complete information disclosure at the time of issuance and has a transparent governance structure, it can operate within a compliance framework. This could significantly alleviate the compliance pressure on project parties and attract a new wave of token financing projects back to the U.S. market.

In addition, the newly established internal research group of the SEC is re-evaluating the attributes of mainstream public chain assets. If some tokens that have a broad application base are excluded from being classified as securities, it will open up more varieties for encryption ETFs. In fact, on Atkins' first day in office, the SEC quickly approved the options trading for Ethereum spot ETFs, providing investors with more channels for participation and signaling support for the financialization of encryption assets.

Conclusion

Paul Atkins' appointment represents a new regulatory cycle for the encryption industry in the United States. If key aspects such as stablecoin compliance channels, exchange registration systems, and token legal identification can break through during his tenure, it will reshape the United States' position in the global encryption governance system. More importantly, the change in regulatory logic will release stronger institutional signals: it is not that regulation is reduced, but rather that regulation is clearer, more consultative, and more constructive.

For the encryption industry, this is a hard-won respite and a restart that requires more rationality and self-discipline. However, Atkins is not an "laissez-faire advocate"; he has repeatedly stated in multiple speeches that the SEC will continue to crack down on illegal activities such as fraud, insider trading, and market manipulation. The real change lies in letting the industry know "where the path to compliance is."

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Ser_Liquidatedvip
· 14h ago
Hi, gm! Let's get to work and eat 🌙.
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DecentralizedEldervip
· 08-05 19:12
Finally kicked the bully out of the encryption circle.
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BlockchainFriesvip
· 08-05 19:07
It was time to get Old Gao out long ago.
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ContractTestervip
· 08-05 19:01
Haha, Gensler is finally out.
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GasFeeCryervip
· 08-05 18:59
amazing It has connected, now let's see if the gas can fall or not.
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