SEC Chair Paul Atkins Unveils Three-Part Crypto Regulation Strategy, Signaling Shift to Clear Crypto Rules

On May 12, 2025, U.S. Securities and Exchange Commission (SEC) Chairman Paul Atkins announced a pivotal shift in the agency’s approach to cryptocurrency regulation during the Crypto Task Force roundtable focused on tokenization. Moving away from the enforcement-first tactics of his predecessor, Gary Gensler, Atkins pledged to prioritize clear, fit-for-purpose rulemaking to support digital asset innovation. Outlining a three-part strategy, Atkins detailed plans to streamline token issuance, clarify custody rules, and expand trading options for digital assets, signaling a pro-innovation stance that aligns with industry demands for regulatory clarity.

Atkins’ Vision: From Enforcement to Rulemaking

Sworn in as SEC Chairman on April 21, 2025, Paul Atkins quickly established himself as a crypto-friendly leader. At the May 12 roundtable, he declared, “It is a new day at the SEC. Policymaking will no longer result from ad hoc enforcement actions. Instead, the Commission will utilize its existing rulemaking, interpretive, and exemptive authorities to set fit-for-purpose standards for market participants.” Comparing blockchain assets to the transformative impact of MP3s, Atkins emphasized that “on-chain” securities “has the potential to remodel aspects of the securities market by enabling entirely new methods of issuing, trading, owning, and using securities.”

Atkins’ shift from enforcement to rulemaking addresses long-standing industry criticisms of the SEC’s “regulation by enforcement” approach under Gensler, which saw high-profile lawsuits against firms like Coinbase and Ripple, both of which have since been resolved through settlements and dismissals. Recognized as a crypto advocate, Atkins’ prior role as co-chair of the Digital Chamber’s Token Alliance and his divested $6 million in crypto-related investments highlight his deep industry ties, fostering optimism among crypto professionals that he will champion policies supportive of digital asset innovation. To learn how Paul Atkins emerged as a crypto advocate and SEC Chairman, explore our detailed profile on his journey.

Atkins’ Three-Part Strategy: A Blueprint for Crypto Regulation

Atkins’ three-part strategy, outlined at the roundtable, includes streamlining token issuance, revising custody rules to accommodate blockchain technology, and exploring self-custody options for funds and advisors under specific conditions. These efforts aim to provide “clear rules of the road,” a phrase Atkins has repeatedly used to signal his commitment to regulatory clarity.

• Clear Token Issuance Guidelines: Atkins aims to simplify rules for crypto assets classified as securities, noting that only four issuers have pursued registered or Regulation A offerings due to complex disclosure requirements. Recent SEC staff guidance clarified that some distributions are exempt from securities laws, and Atkins seeks to encourage compliant offerings.

• Flexible Custody Rules: Atkins supports expanding options for crypto asset custody, including defining “qualified custodians” under the Advisers Act and Investment Company Act and allowing exceptions to accommodate blockchain practices, potentially enabling self-custody.

• Broader Trading Platforms: Atkins endorses allowing registrants to offer diverse crypto products, such as “super apps” integrating securities and non-securities trading. He has tasked SEC staff with modernizing the Alternative Trading System (ATS) framework and exploring rules to list crypto on national exchanges.

Crypto Task Force Drives Collaborative Regulation

To operationalize his vision, Atkins has leaned on the SEC’s Crypto Task Force, led by Commissioner Hester Peirce, known as “CryptoMom” for her pro-crypto advocacy. Launched on January 21, 2025, by then-Acting Chairman Mark Uyeda, the task force has held five roundtables by May 12, covering asset classification, trading, custody, and tokenization. The May 12 session, attended by executives from BlackRock, Fidelity, and Nasdaq, explored how tokenized assets could integrate with traditional finance. The task force is tackling critical regulatory questions, such as whether crypto assets should be classified as securities or commodities—a debate that has strained relations with the Commodity Futures Trading Commission (CFTC).

Market Context and Industry Expectations

Atkins’ announcement coincides with a robust crypto market. As of May 13, 2025, Bitcoin trades above $102,000, Ethereum has reclaimed $2,400, and the stablecoin USDT has reached an unprecedented $150 billion market cap. The crypto industry eagerly anticipates Atkins’ promise of clear, tailored regulatory rules. The SEC recently delayed approvals for several altcoin ETFs, with sources indicating the agency is awaiting clearer definitions of altcoins’ regulatory status under Atkins’ leadership. Atkins also addressed this on the roundtable, noting he has directed staff to modernize the Alternative Trading System (ATS) framework to accommodate crypto assets and explore guidance or rulemaking to enable their listing and trading on national securities exchanges. Market sentiment is bullish regarding Atkins’ regulatory approach and potential altcoin ETF approvals. On the prediction platform Polymarket, the probability of a Dogecoin ETF approval in 2025 stands at 62%, an XRP ETF at 78%, and a Solana ETF at 89%, reflecting strong investor confidence in Atkins’ leadership.