Nikolas Sargeant
Securities and Exchange Commission Chair Paul Atkins made a groundbreaking declaration at the OECD Roundtable in Paris, stating that "most crypto tokens are not securities" while announcing a comprehensive overhaul of the agency's approach to digital asset regulation. Speaking on Wednesday, Atkins proclaimed "it is a new day at the SEC," signaling a dramatic shift from the previous administration's aggressive enforcement-focused strategy toward the cryptocurrency industry.
Under the newly unveiled Project Crypto initiative, the SEC plans to modernize securities regulations to better accommodate blockchain-based financial markets. Atkins emphasized that policy will no longer be set through "ad hoc enforcement actions," instead promising "clear, predictable rules of the road so that innovators can thrive in the United States." The initiative builds on recommendations from the President's Working Group on Digital Asset Markets, which has reportedly delivered a comprehensive blueprint for regulatory reform.
The SEC's updated framework will allow platforms to operate as "super-apps" that can facilitate multiple digital asset activities including trading, lending, and staking under a single regulatory umbrella. These platforms will also have flexibility to offer various custody solutions, reflecting Atkins' philosophy of providing "the minimum effective dose of regulation needed to protect investors, and no more." The approach aims to avoid burdening entrepreneurs with duplicative rules that favor only the largest incumbent financial institutions.
Atkins praised the European Union's Markets in Crypto-Assets (MiCA) framework as a model for comprehensive digital asset regulation, suggesting U.S. policymakers could learn from Europe's early regulatory steps. He called for increased international cooperation to "facilitate more innovative markets," contrasting with recent European Banking Authority rules requiring EU banks to hold significantly more capital against unbacked cryptocurrencies like Bitcoin and Ethereum. The regulatory divergence highlights the competitive landscape emerging between jurisdictions seeking to attract digital asset innovation.
Atkins' Swift Regulatory Transformation
Following his confirmation as the 34th SEC chairman in a 52-44 Senate vote on April 21, Paul Atkins has moved quickly to implement sweeping changes that mark a dramatic departure from his predecessor's approach. The former SEC commissioner, who previously served from 2002 to 2008, was nominated by President Trump specifically to reverse Gary Gensler's "regulation by enforcement" strategy that treated many digital assets as securities and launched numerous enforcement actions against crypto firms. Atkins' appointment comes at a critical juncture as blockchain projects including Uniswap, Solana, and Layer2 networks face regulatory scrutiny while international threats like the Lazarus Group underscore the need for balanced oversight that protects investors without stifling innovation.
The Project Crypto initiative represents the practical implementation of Atkins' regulatory philosophy, directly responding to recommendations from the President's Working Group on Digital Assets. Key reforms include easing licensing requirements to allow brokerages to offer multiple asset classes under single licenses, creating distinct market structures that separate commodities from securities, and providing regulatory exemptions and grace periods for early-stage crypto projects and initial coin offerings. The SEC has already begun materializing these changes by approving several crypto exchange-traded fund applications, clarifying that staking rewards don't constitute securities transactions, and approving in-kind creations and redemptions for crypto ETFs. Under the new framework, the SEC and CFTC will share joint oversight of the crypto industry, with the CFTC maintaining sole authority over spot cryptocurrency markets.
