Paul Atkins, the Chair of the US Securities and Exchange Commission (SEC), is advocating for a comprehensive reform of crypto regulations with the aim of making these changes resilient to future shifts in administrative focus. Atkins emphasizes the need to adjust existing securities trading rules to better integrate tokenized alternatives. He remains committed to preserving the core principles that drive the cryptocurrency sector.
Atkins has initiated a reformative campaign, known as "Project Crypto," aiming to secure these regulatory changes against potential reversals by future administrations. “What is really important to me is that we future-proof what we’re doing,” Atkins stated, highlighting his concern about maintaining the reforms' longevity amidst possible future policy shifts. While he did not detail specific measures to safeguard these changes, his comments were made during the Blockchain Association’s annual policy summit held in Washington, DC, which featured prominent speakers including US Treasury Secretary Howard Lutnick and Comptroller of the Currency Jonathan Gould.
Since its announcement in July, "Project Crypto" has received positive feedback from the industry. Atkins initially described the initiative as a strategy to ensure the crypto market's prominence, evaluating the pros and cons of transitioning from off-chain to on-chain market environments. The SEC staff has been tasked with formulating proposals to clarify the regulatory status of crypto assets, facilitate traditional financial institutions in managing crypto assets for clients, enable all-in-one financial “super-apps,” and harness the potential of on-chain systems within securities markets.
In a recent address at the Federal Reserve Bank of Philadelphia, Atkins outlined his perspective on crypto assets, categorizing them into digital commodities, digital collectibles, digital tools, and tokenized securities. According to Atkins, only tokenized securities should fall under SEC regulation, and he indicated that future SEC efforts would concentrate on these assets. He highlighted the necessity of revising securities trading rules to accommodate the on-chain trading of tokenized equities, noting that current regulations may not align well with the dynamics of a tokenized environment.
Despite the support, the plan has faced criticism. Citadel Securities, a major US market maker, expressed concerns in a letter to the SEC that relaxing existing regulations might disrupt US equities markets by favoring decentralized exchanges over traditional ones. Nonetheless, Atkins dismissed the idea of segregating traditional markets from the smaller, more volatile crypto markets. He advocated for interoperability and the freedom of movement, principles he views as fundamental to distributed ledger technology. “Let people innovate. Let the market decide what it wants to do,” Atkins stated, reinforcing his commitment to fostering a dynamic and integrated market environment.
The article was contributed by Aleks Gilbert, a DeFi correspondent based in New York for DL News.