SEC chair outlines main directions of regulatory work ahead

U.S. Securities and Exchange Commission (SEC) Chairman Paul Atkins recently told Fox Business that the agency will pursue crypto rulemaking and seek an innovation exemption to maintain the U.S.’s leadership in digital finance.

Summary

• In an interview with Maria Bartiromo, Paul Atkins clarified that the SEC is preparing an innovation exemption for the end of 2025.
• The exemption is designed to allow crypto companies to launch their products without fear of restrictive securities laws being applied to them.
• Atkins noted that the SEC and the CFTC are working closely together to provide the marketplace with a stable platform for introducing new products.

Atkins told anchor Maria Bartiromo on Sept. 23 that the SEC is working closely with the Commodity Futures Trading Commission to determine the distribution of responsibility between the agencies and bring certainty to the market structure. 

Some projects (like single stock futures) were “torpedoed” only because of the uncertainty in whether they should have been supervised by the SEC or the CFTC.

He stated that both agencies will focus on rulemaking in the coming months and aim to establish an innovation exemption by year-end. The SEC chair said that it is not an ad hoc approach:

“We’re trying to give the marketplace some kind of stable platform upon which they can introduce their products,” he said.

The exemption aims to enable crypto businesses to launch their products immediately, thereby avoiding the early bureaucratic and regulatory burdens that typically hinder projects.

Atkins compared to Gensler

During the DeFi and American Spirit roundtable in June, Atkins explained the need for the conditional exemption relief framework in order to encourage developers.

Meanwhile, the SEC is working on new rules that Atkins argues will replace outdated securities laws applied to the crypto space.

The previous SEC chairman, Gary Gensler, treated various cryptocurrencies as unregistered securities. Still, many of the sector’s U.S.-based brands thrived, including Coinbase, Strategy, Robinhood, Ripple, and Circle. 

However, many crypto pros insist that Gensler’s cautious approach to the emerging industry left the U.S. behind Europe and the UK in terms of access to cryptocurrency markets and services. For example, Coinbase’s staking service is not available in five states. 

For years, Americans have faced challenges in participating in airdrops, buying spot ETFs, perpetual futures, and tokenized securities, as well as accessing the largest crypto exchanges, among other issues. That’s not the scenario in the UK and Europe. Estonia, one of the countries that pioneered nation-level blockchain adoption, offered tokenized securities back in 2019.

‘Make IPOs great again’

As for the plans not directly associated with crypto, Atkins said that he wants to “make IPOs great again.” He stressed that ordinary investors need to diversify their portfolios, but it’s not an easy task in the current circumstances.

According to the SEC chair, the number of public companies has shrunk by 50% in the last 30 years. He explained that going public became too burdensome in terms of regulation, compliance, reporting, and other requirements. That’s why not many companies are seeking to become public.

The fact that the top public corporations are all tech companies increases risks. So, Atkins sees the solution in streamlining and safeguarding ordinary investors’ access to private funds.

In general, Atkins’s appearance on Bartiromo’s “Mornings with Maria” indicated the SEC chair’s effort to allow U.S. crypto companies to self-regulate and provide retail investors with a broader set of investment options.