Chair outlines plans to replace ad hoc enforcement with rule-based framework
The chair of the US Securities and Exchange Commission has announced a sharp departure from the agency’s previous approach to regulating digital assets, pledging to establish formal rulemaking procedures to govern the issuance, custody and trading of crypto-related securities.
In a keynote address at the SEC’s Crypto Task Force roundtable in Washington on May 12, Chairman Paul Atkins committed to ending what he described as a period of “regulation by enforcement” and signalled that the Commission would adopt a more structured and transparent framework for digital assets.
He said the move was intended to support innovation in blockchain-based finance while maintaining investor protection.
“The Commission will utilise its existing rulemaking, interpretive, and exemptive authorities to set fit-for-purpose standards,” Atkins said. “Policymaking will no longer result from ad hoc enforcement actions.”
Implications for custody and trading platforms
Of particular relevance to payments and trading firms were Atkins’ remarks on crypto asset custody. He confirmed the SEC had rescinded Staff Accounting Bulletin 121, a controversial policy seen as a significant hurdle for companies offering custodial services for digital assets. The reversal is expected to lower operational and capital costs for institutions managing crypto holdings.
The chairman also hinted at broader changes to existing custody regulations, suggesting the agency may recognise a wider range of qualified custodians and potentially allow for regulated self-custody arrangements under certain conditions.
This would mark a notable evolution in the treatment of digital asset infrastructure under the Investment Advisers Act and related regulations.
On the trading side, Atkins indicated support for platforms seeking to offer a mix of securities and non-securities products — including so-called “super apps” — provided they meet underlying compliance standards.
The SEC is expected to review whether current rules governing alternative trading systems (ATS) remain appropriate for crypto markets and explore additional guidance to facilitate the listing of tokenised assets on national exchanges.
Registration hurdles under review
Atkins also acknowledged longstanding difficulties faced by crypto firms attempting to register token offerings with the Commission. Only a small number have successfully completed registered or exempt offerings to date, in part due to outdated disclosure requirements and unclear application of securities definitions.
The chairman confirmed that staff have begun reviewing existing registration forms and safe harbour regimes, and may recommend exemptions or revised disclosure formats more suitable for digital assets. However, he cautioned that further guidance from the full Commission — rather than staff statements — would be required to give the market certainty.
“The SEC has adapted its forms in the past for asset-backed securities and REITs,” Atkins said. “We should do the same for crypto.”
Political and industry context
The speech follows growing pressure from within the industry and parts of the US government to clarify the regulatory status of crypto assets. President Donald Trump has publicly called for the United States to become the “crypto capital of the planet,” and several lawmakers have proposed legislation to codify a regulatory framework for digital assets.
Atkins’ remarks suggest the SEC is positioning itself to take a more proactive role in this space, potentially aligning more closely with the priorities of the executive branch and other regulators. The formation of the internal Crypto Task Force, led by Commissioners Mark Uyeda and Hester Peirce, reflects a broader push to break down institutional siloes within the agency.
While the chairman stopped short of announcing any immediate rule changes, industry participants are likely to view the speech as a meaningful signal that the SEC may adopt a more constructive and predictable stance on digital asset markets.
Firms urged to re-engage
For payment firms, custodians and fintechs that had put US-facing crypto initiatives on hold due to regulatory uncertainty, Atkins’ remarks may represent a shift worth monitoring closely.
Though practical outcomes will depend on future rule proposals and Commission votes, the tone and direction of the speech mark a notable departure from recent enforcement-led policy.
“I believe that the Commission has broad discretion under the securities acts to accommodate the crypto industry,” Atkins said. “And I intend to get it done.”
