Atkins’ SEC ‘won’t fear innovation’ as chairman promises clear crypto regulation

The SEC Chairman Paul S. Atkins delivered his remarks at the SEC Speaks conference on May 19, 2025, and his focus was on the importance of innovation in the financial markets.

The SEC has faced criticism for its handling of the crypto markets. However, Trump’s appointee to lead the regulator, Atkins announced a new direction for the agency that includes drafting rule proposals related to crypto and improving communication with market participants.

Atkins’ new directive for the SEC

Atkins discussed innovation and how the SEC need not fear in his opening remarks.

“Rather, it should embrace and champion it. Markets, by their nature, evolve,” the chairman said.

He went on to point out how over the past couple of decades, the agency had both enabled innovation and, at times, stifled it. This was the case with the Gary Gensler -run SEC, but Atkins is convinced things have changed and innovation has become the order of the day.

“The crypto markets have been languishing in SEC limbo for years,” Atkins said . “The SEC first pursued what I call the “head-in-the-sand” approach—perhaps hoping that crypto would go away. Then, it pivoted and pursued a shoot-first-and-ask-questions-later approach of regulation through enforcement.”

He pointed out that such an environment did not create trust and in reality was passing the wrong message. Atkins has now directed the Division of Corporation Finance staff to maintain transparent interactions with the public, a move he believes will allow market participants to move more nimbly and allocate capital to productive uses.

Atkins plans to change how the SEC operates

In the past, the SEC was often criticized for its cautious, stifling stance towards the crypto market. However, Atkins has vowed his tenure will be different.

Atkins mentioned in his remarks that he has directed Commission staff across policy Divisions to begin drafting rule proposals related to crypto.

He suggested that the Commission allow SEC registrants to custody and trade both securities and non-securities under one roof, claiming this could “reduce costs for investors while allowing non-security trading to enter a regulated environment at the federal level expeditiously.”

Now that the SEC has plans to encourage innovation, it has asked Congress for reprogramming approval to integrate the functions of the agency’s Strategic Hub for Innovation and Financial Technology, aka “FinHub” into other parts of the agency.

FinHub, which was established in 2018 during a critical period of emerging technologies, is the culmination of a centralized effort to build understanding of the rapid development of distributed ledger technology, including digital assets, AI, and machine learning.

According to Atkins, the principles and priorities under which FinHub was founded are being integrated into the very fabric of the SEC. He said this will ensure that innovation is ingrained in the culture SEC-wide, rather than focused on one small office.

The final area Atkins addressed in his remarks was the Consolidated Audit Trail, known as CAT, a topic that has drawn much scrutiny.

“It has quite an appetite for data and computer power, with costs rising to nearly $250M a yr,” Atkins said. “These costs are divvied up and eventually fall on the shoulders of investors.”

Atkins claims to have instructed the staff to undertake a comprehensive review of the CAT. Aside from examining the costs of the system, he has asked the staff to revise the reporting requirements and scope of what is collected.

To round it all up, Atkins reiterated that under his tenure as chairman, the SEC will return to its roots of promoting, rather than stifling, innovation. “The markets innovate,” he said. “And the SEC should not be in the business of telling them to stand still.”

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