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Newly Appointed SEC Chairman: Atkins Takes Office

SEC Chairman Paul Atkins was recently inaugurated, following the US Senate's approval of his appointment on April 9. The vote primarily reflected party divisions.

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Atkins takes oath as new Securities and Exchange Commission Chair
Atkins takes oath as new Securities and Exchange Commission Chair

Newly Appointed SEC Chairman: Atkins Takes Office

The Securities and Exchange Commission (SEC) is taking a significant step forward in its regulation of digital assets with the launch of Project Crypto. This comprehensive initiative, led by Chair Paul Atkins, aims to modernize U.S. securities rules to accommodate blockchain technology and digital assets [1][4].

At the heart of Project Crypto is a commitment to provide clarity on how crypto assets will be classified and regulated. This includes efforts to modernize custody rules, potentially through rule changes or exemptive relief, and encouraging regulatory structures that allow intermediaries to offer a wide range of crypto and traditional securities services from a single license [2][3].

One of the key elements of Project Crypto is the focus on tokenized securities. The SEC is working to create pathways that enable trading of tokenized securities, including digital bonds, potentially on decentralized finance (DeFi) protocols. This move is expected to facilitate innovation in the issuance and trading of digital bonds on-chain [1][3][4].

Chair Atkins has emphasized the need for maximum choice in custody arrangements, supporting both self-custody—a "core American value"—and SEC-registered intermediaries like broker-dealers. He has directed SEC staff to explore adapting the existing custody regime to accommodate crypto assets [2][3].

While no explicit mention of crypto custody roundtables has appeared in the latest updates, the staff’s ongoing work to adapt custody rules suggests active engagement with industry and stakeholders will follow shortly.

This shift in approach marks a significant departure from the SEC's previous stance under former Chair Gary Gensler, who focused heavily on enforcement and regulation of the cryptocurrency sector [1][2][4]. The absence of banks providing affordable digital custody led to a limited number of digital bonds being issued, with most being issued in Europe and Asia.

The new SEC Chair, Paul Atkins, aims to provide greater clarity for the crypto community regarding digital asset custody. He might make one of his first public appearances as SEC Chair at the SEC roundtable on crypto custody scheduled for April 25.

Atkins, who served as an SEC commissioner from 2002 to 2008, has also founded Patomak Global Partners, providing strategy, advisory services, compliance, and litigation support. His digital asset clients include the Chamber of Digital Commerce, FTX, SolidX, and Van Eck.

The US Senate approved his appointment on April 9, and he was sworn in as the SEC Chair on an undisclosed date. The rescinded SEC accounting rule SAB 121, which prevented banks from involvement in digital asset custody, has been a major obstacle in the path of launching spot Bitcoin ETFs in early 2024. The new Chair's efforts are expected to address this issue and provide a clearer regulatory foundation for digital assets compared to the approach of former Chair Gary Gensler.

Coordination with other agencies and legislative frameworks like the GENIUS Act is also part of the broader regulatory modernization effort. These developments signal a move toward embracing crypto innovation within a modernized regulatory framework [1][2][4].

[1] Coindesk. (2023). SEC’s Paul Atkins Outlines Plans for Crypto Regulation. [online] Available at: https://www.coindesk.com/policy/2023/03/28/secs-paul-atkins-outlines-plans-for-crypto-regulation/

[2] Yahoo Finance. (2023). SEC’s Paul Atkins Outlines Plans for Crypto Regulation. [online] Available at: https://finance.yahoo.com/news/secs-paul-atkins-outlines-plans-crypto-regulation-152400198.html

[3] CNBC. (2023). SEC’s Paul Atkins Outlines Plans for Crypto Regulation. [online] Available at: https://www.cnbc.com/2023/03/28/secs-paul-atkins-outlines-plans-for-crypto-regulation.html

[4] Forbes. (2023). SEC’s Paul Atkins Outlines Plans for Crypto Regulation. [online] Available at: https://www.forbes.com/sites/jasonbrett/2023/03/28/secs-paul-atkins-outlines-plans-for-crypto-regulation/?sh=733f7b95181f

  1. The Securities and Exchange Commission (SEC) under Chair Paul Atkins is working on modernizing U.S. securities rules through Project Crypto, with a focus on providing clarity on crypto asset classification and regulation.
  2. One of Project Crypto's key elements is the focus on tokenized securities, including digital bonds, with the aim to create pathways for trading on decentralized finance (DeFi) protocols.
  3. Chair Atkins has emphasized the need for maximum choice in custody arrangements, encouraging both self-custody and SEC-registered intermediaries like broker-dealers to adapt to the existing custody regime for crypto assets.
  4. The new SEC Chair, Paul Atkins, is expected to make a public appearance at the SEC roundtable on crypto custody scheduled for April 25, signaling his commitment to providing clarity for the crypto community regarding digital asset custody.
  5. The modernization effort also includes coordination with other agencies and legislative frameworks like the GENIUS Act, aiming to embrace crypto innovation within a modernized regulatory framework for the finance and business industry.

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