- The SEC shifts its stance on digital assets, embracing a more flexible regulatory approach.
- Project Crypto seeks to clarify rules on token distribution, custody, and trading.
- SEC’s collaboration with the CFTC aims to reduce regulatory overlap and boost industry growth.
The Securities & Exchange Commission (SEC) is shifting its approach to digital assets under the leadership of Chair Paul Atkins. The agency is working on new rules to support President Trump’s vision of making the U.S. a global crypto leader. This change is an important step away from the Biden administration’s stricter stance on cryptocurrency regulation.
Atkins confirmed that the SEC is mobilizing its divisions to execute the Crypto Working Group’s recommendations. Trump’s Crypto Working Group demands modernization of the regulations established almost 90 years ago. The SEC seeks to revise these regulations to reflect the booming nature of the digital asset market.
SEC’s Push for Flexible Crypto Regulations
The efforts of the SEC is evident with the GENIUS Act, regulating the issuance of stablecoins. According to Atkins, the agency would proceed to regulate crypto, and the laws enacted by Congress would give the agency direction. It differs from what happened in the Biden administration, as it scrutinized the crypto sphere.
The new strategy of the SEC is concentrating on establishing a more flexible regulatory environment. The idea is to promote innovation within the crypto industry by changing rules to be more dynamic to the changing environment. The trend might allow more space to be given to digital assets to thrive and cater to the demand of transparent regulatory frameworks.
Project Crypto is one of the major projects of the SEC that encourages the simple regulation of digital assets. The initiative would clarify regulations around token distribution, trading, and custody. The SEC aims to facilitate the development of decentralized finance (DeFi) and blockchain by cutting uncertainty.
SEC Empowers Investors with New Crypto Rules and Collaboration
Atkins emphasized that the SEC’s new rules would give investors more freedom in choosing how they manage their assets. The focus is on empowering businesses and individuals while still ensuring the protection of investors. This shift is expected to recalibrate the power dynamics in crypto custody, with larger firms possibly benefiting from the new regulations.
The new direction of the SEC is in line with such recent legislative initiatives as the enactment of the CLARITY and the Anti-CBDC bills. These bills remain waiting to be approved by the Senate, striving to give clarity over how the Senate would treat digital currencies under U.S. law.
Related: SEC Chair Atkins Launches ‘Project Crypto’ to Modernize U.S. Rules for On-Chain
This change is directly related to the cooperation of the SEC with other market watchdogs, including the Commodity Futures Trading Commission (CFTC). Through cooperation, the two agencies would be able to eliminate redundancy in regulations and draft a single framework. It would allow crypto firms to operate more easily and keep the U.S. competitive globally.
Atkins’ sentiments reflect a broader pro-crypto stance that aligns more closely with the Biden administration’s approach. Earlier, he slammed the “Operation Chokepoint 2.0” strategy that restricted crypto custody options. He was also supportive of so-called super-apps that would process securities and non-securities on the same license, another sign of his more permissive regulatory approach.
The new policy changed the previous stance of the SEC during the Biden era that was more stringent in nature. The SEC believes that through prioritizing invention and regulatory transparency, they would drive a healthier competition in the crypto market. These changes are likely to spur innovation but also test the limits if they would merely shift the power equations within the industry.
