SEC Chairman's latest statement on crypto asset regulation: Commitment to end "law enforcement regulation" and consolidate US Crypto leadership

‍SEC Chairman Paul Atkins called for a comprehensive modernization of the U.S. Crypto asset policy and outlined a three-part strategy for issuance, custody and transaction regulation reforms.

On May 12, Atkins made the above statement in his keynote speech at the latest roundtable of the SEC Crypto Assets Task Force, which explored the potential of tokenization and its upgraded capital markets.

Atkins compares the transformation to blockchain-based securities to digital transformation in the music industry, and he believes that "on-chain" assets may revolutionize the capital market just as MP3 reshapes the way audio is distributed.

Under Atkins, the SEC's priority is to tailor a "reasonable regulatory framework" for the digital asset market, breaking away from years of unpredictable law enforcement patterns that hinder innovation.

He promised that policymaking would be carried out in the future through formal channels rather than temporary action, and reiterated his recent statement.

"The SEC has ushered in a new situation," Atkins said.

Three-pronged reform plan

Atkins has set up an ambitious reform agenda focusing on promoting the issuance of Crypto assets that meet regulations, expanding legal custody options and modernizing the trading framework.

He noted that only a few projects successfully registered the issuance through the traditional SEC approach, noting that outdated disclosure forms and legal uncertainty are major obstacles.

To address this issue, regulators will consider setting more appropriate exemptions, safe harbor rules and disclosure guidelines for digital native assets. He stressed that temporary staff guidance is only temporary and requires complete rules to be formulated by the committee to establish lasting standards.

In terms of custody, Atkins supports the repeal of Employee Accounting Notice No. 121, which has taken restrictive measures to hold Crypto assets. He called for a broader and clear definition of the qualifications of “qualified trustees” and said that custody rules should keep pace with the times to reflect self-custody solutions and emerging best practices in the industry.

In terms of transactions, Atkins stated that it supports allowing brokerage dealers to provide comprehensive services including Crypto assets and non-Crypto assets on a unified platform. He also raised the possibility of conditional exemption to allow the introduction of new products that may not yet comply with existing rules.

Strengthen the U.S. leadership in Crypto

Atkins echoed President Donald Trump’s call to make the United States the “global Crypto capital” and warned that if the SEC cannot adapt to the development of the situation, innovation will flow overseas.

He praised Mark Uyeda and Hester Peirce, co-head of the newly formed Crypto Assets Task Force, which aims to break down internal barriers and accelerate the introduction of guidance documents throughout the agency.

In his speech, Atkins emphasized the need to create rules that protect investors and support innovation. He stressed that combating fraud remains a priority, but the SEC's enforcement approach will return to its "original intention" to regulate violations of established obligations rather than enforcing policies.

The SEC is expected to continue to advance additional rulemaking, staff guidance and inter-agency coordination in the coming months, striving to build the United States into a leader in tokenized financial infrastructure.