New SEC Chair Paul Atkins signals a pivot towards a pro-innovation approach in cryptocurrency regulation, departing from the hardline stance of the previous administration. At a Crypto Task Force roundtable, he emphasised the need for clear regulatory frameworks to support digital asset growth. Panel discussions highlighted the mismatch of existing custody regulations with crypto practices, advocating for principles-based regulations.
In an eye-catching move just days into his tenure, SEC Chair Paul Atkins has taken a fresh, pro-innovation approach toward cryptocurrency. Speaking at the agency’s Crypto Task Force roundtable, Atkins made it clear that he plans to change the previous administration’s enforcement-heavy regulatory style, a shift many believe could rejuvenate the U.S. digital asset market. He expressed concern about how regulatory uncertainties have stunted innovation—noting the SEC’s role in exacerbating these issues.
Atkins, a former SEC commissioner under President George W. Bush, emphasised that market participants need clear regulations. His goal, as he stated, is to construct a “rational fit-for-purpose framework for crypto assets.” He announced that SEC Commissioner Hester Peirce will spearhead these efforts, praising her advocacy work that has led to her endearment in the crypto community as the ‘crypto mom.’
Importantly, Atkins recognised the potential benefits of blockchain technology on the financial system—efficiency, cost reduction, transparency, and risk mitigation. The roundtable discussion delved into perhaps the most complicated topics: custody of digital assets, which has raised substantial regulatory questions that merit careful consideration.
Seamus Rocca, CEO of Xapo Bank, called the SEC’s renewed focus on crypto custody a positive development. He stressed the need for secure custody as a fundamental building block of investor trust. Rocca pointed out that traditional financial practices don’t necessarily apply to the cryptocurrency environment. In fact, the industry needs new, tailored infrastructure made for crypto.
At the roundtable, several experts highlighted the mismatched nature of existing regulations, which were originally designed for a paper-based financial system. Susan Gault-Brown, an attorney at Allen Overy Shearman Sterling LLP commented that the digital asset ecosystem functions differently and needs corresponding regulations.
Larry Florio, general counsel at 1kx, echoed that traditional custody models simply don’t work in the crypto world, given its technological capacities. Adam Levitin from Georgetown Law highlighted the challenges in reconciling peer-to-peer payment systems with centralised trading structures, indicating a fundamental disconnect in expectations for custodians.
There was a strong push from several panellists for principles-based regulations that adapt quickly to emerging technologies rather than relying on outdated tech-specific rules. Mark Greenberg from Kraken emphasised that assets should be secured in systems, not dependent on individual custodians, marking a drastic shift in thinking about crypto security.
As these discussions unfolded, many participants voiced concerns about regulatory clarity—or the lack thereof—driving innovation and development out of the U.S. Baylor Myers of BitGo lamented that U.S. firms were left struggling while receiving approvals overseas.
Support for clearer guidelines from foreign regulators was echoed by Brandon Russell at Etana Custody. He underscored how abroad, regulations were defined early on, which allowed those markets to flourish. The sentiment is that the domestic landscape is on the cusp of a major shift, one that could dramatically reshape the U.S. cryptocurrency policy framework in the coming months.
