The new head of the SEC takes office, and U.S. encryption regulation welcomes a "restart moment"

On April 22, 2025, Paul Atkins officially took office as the 34th chairman of the U.S. Securities and Exchange Commission (SEC). This "free-market" regulator, nominated by the president and confirmed by the Senate, made it clear upon taking office that building a clear and open regulatory framework for digital assets would be his "top priority."

Compared to his predecessor, Atkins's appointment is seen by the industry as a "restart moment" for U.S. encryption regulation. The former administration focused primarily on enforcement, viewing almost all tokens as securities, which left entrepreneurs, investment firms, and trading platforms in a prolonged state of uncertainty and risk.

From Traditional Regulators to "Encryption Veterans"

Atkins is a typical "Washington-Wall Street shuttle". He graduated from Wofford College and Vanderbilt University Law School, and early in his career worked at top law firms, engaging in securities issuance and mergers and acquisitions. He joined the SEC in the early 1990s and served as a senior advisor to two former chairmen.

In 2002, Atkins was appointed as a commissioner of the SEC. Before stepping down in 2008, he was known for promoting transparent regulation and opposing bureaucratic expansion, making him one of the representatives of the American free market regulatory concept. In 2009, he founded a compliance consulting firm to provide compliance strategy services for financial institutions and encryption companies.

During the process of establishing the consulting firm, Atkins built deep connections with the encryption industry. He serves as the co-chair of the "Token Alliance" under the U.S. Chamber of Digital Commerce, leading the development of best practices for token issuance and encryption platforms. He has also provided strategic consulting for several well-known encryption companies and invested in encryption asset funds. Financial disclosures indicate that his family's encryption-related assets amount to several million dollars.

These experiences have made Atkins one of the few representatives among traditional regulators who have both theoretical knowledge and practical experience in the encryption industry. Although his encryption background has sparked controversy, the Senate majority ultimately granted support, which not only recognizes his professional capabilities but also reflects a loosening attitude towards encryption regulation in the American political climate.

Regulation Should Not Be the Enemy of Innovation

Unlike the previous regulatory path of the "litigation governance industry", Atkins clearly stated: the mission of the SEC should shift from "defining rules through enforcement" to "guiding compliance through rules".

He believes that regulation should not come at the expense of suppressing innovation, nor should it allow the market to wander in a legal gray area for a long time. "Regulation should not be the enemy of innovation," but should provide "rational, clear, and enforceable compliance paths," which is the first key signal he has released to the entire encryption industry.

Atkins criticized the previous administration's "one-size-fits-all approach to treating cryptocurrencies as securities," which has led the market into a vicious cycle of "being sued first and looking for rules later." In contrast, he prefers to build a more flexible and adaptive regulatory classification system based on dimensions such as token functionality and decentralization levels, and pointed out that "the U.S. should not lose its competitive advantage in the Web3 era due to regulatory uncertainty."

Since the Senate voted to confirm Atkins as chair on April 9, a series of actions by the SEC has clearly made the encryption industry feel the shift in regulatory winds:

1. Initiate a dialogue with the encryption industry. The SEC's cryptocurrency working group plans to hold four public roundtable meetings covering key topics such as exchange regulation, custody standards, DeFi compliance, and asset tokenization, inviting industry representatives, consumer organizations, and policy researchers to discuss regulatory pathways.

2. A large number of settlements or withdrawals in encryption litigation cases. After Atkins took office, the SEC's attitude towards existing encryption litigation cases has obviously softened. Several project litigations have been directly withdrawn, which is referred to in the industry as the "regulatory amnesty wave."

3. The initial formation of encryption disclosure standards. The SEC's Division of Corporate Finance has released non-binding guidance on the disclosure of information regarding cryptocurrency token offerings, covering project structure, token functionality, governance design, development progress, and more.

These directional measures indicate that the SEC, led by Atkins, is moving from the past "high-pressure control" to "transparent co-governance." Rather than being a relaxation of regulation, it is more about a return to rational regulation, going back to the origin of serving the market, protecting investors, and encouraging innovation.

The 3 major topics will become the priorities of Atkins' encryption new policy.

After releasing initial friendly signals, the industry is generally focused on the upcoming key policy direction of the SEC under Atkins' leadership. The current market is mainly focused on three major directions:

1. Accelerate the legislative work on stablecoins. Atkins has expressed support for the relevant bills proposed by senators, which establish a basic framework for stablecoin licenses, reserves, information disclosure, etc., and suggests providing state-level exemption channels for small and medium-sized projects.

2. The registration path for compliant exchanges is expected to be opened up. Atkins advocates for establishing a dedicated compliance framework for such platforms, such as allowing registration as an "Alternative Trading System" (ATS) or "encryption-specific brokerage".

3. The criteria for token identification will be reshaped. Atkins is more inclined to classify and evaluate based on the functionality of tokens and the degree of decentralization. He supports granting entrepreneurial projects a 3-year grace period to complete the construction of distributed networks without worrying about legal actions from the SEC.

In addition, the newly established internal research group of the SEC is re-evaluating the attributes of mainstream public chain assets. If certain tokens are excluded from being classified as securities, it will open up more varieties for encryption ETFs.

Conclusion

The appointment of Paul Atkins represents the beginning of a new regulatory cycle for the encryption industry in the United States. If key aspects such as stablecoin compliance channels, exchange registration systems, and token legal recognition can be addressed during his tenure, it will reshape the United States' position in the global encryption governance system. More importantly, the change in regulatory logic will release a stronger institutional signal: it is not that regulation is reduced, but that regulation is clearer, more consultative, and more constructive.

For the encryption industry, this is a hard-won breather, and also a restart that requires more rationality and self-discipline. However, Atkins is not a "laissez-faire" advocate; he reiterated that the SEC will continue to crack down on fraud, insider trading, market manipulation, and other illegal activities. The real change lies in making the industry aware of where the "compliance path is."