The U.S. Securities and Exchange Commission (SEC), under its new chairman Paul Atkins, is shifting its approach to cryptocurrencies. Speaking at a fintech conference in Washington this week, Atkins announced that cryptocurrency regulation and tokenization will be his agency’s “number one priority.” His goal is to create a regulatory environment that fosters innovation and attracts back companies that previously left the U.S. due to uncertainty.

“We want to build a strong framework that brings people back to the United States while ensuring it makes sense for the future, so innovation can thrive,” Atkins said. Jokingly, he added that the agency could be renamed the “Securities and Innovation Commission.”

Moving away from Gary Gensler’s hard line

Paul Atkins became SEC chairman in April and quickly distanced himself from his predecessor Gary Gensler’s strict approach. Gensler pushed for heavy regulation of the crypto market and repeatedly argued that most cryptocurrencies fall under the definition of securities. During his tenure, the SEC launched numerous lawsuits against major crypto firms and was criticized for its “regulation by enforcement” strategy.

Atkins, on the other hand, has taken several steps toward a friendlier environment for digital assets. He says the most fascinating aspect of the crypto world is the distributed ledger technology on which most modern Blockchains are built.

Innovation over obstacles

One of the cornerstones of Atkins’s era is the introduction of an innovation exemption — a special rule allowing companies to launch new blockchain products and services without lengthy approval processes. The SEC chief aims to implement the exemption before the end of the year.

“We’re bringing various solutions, including the innovation exemption, and envision a kind of super app where different agencies cooperate. Why should companies register with multiple offices when we all share the same goal?” Atkins noted.

Government paralysis slows plans

However, progress has been slowed by the ongoing situation in Washington. The U.S. government is in its second week of a partial shutdown after Congress failed to pass the budget. As a result, the SEC is operating in emergency mode with “an extremely limited number of staff” who can handle only critical issues.

Sources:

https://www.theblock.co/post/374852/sec-chair-atkins-charts-pro-innovation-path-crypto-regulation

https://www.sec.gov/newsroom/speeches-statements/atkins-remarks-defi-roundtable-060925

https://www.sec.gov/files/sec-plan-operations-during-lapse-appropriations.pdf