SEC to Influence Crypto Policy Through “Notice and Comment” Process

Paul Atkins, chair of the U.S. Securities and Exchange Commission, informed Congress that under his leadership, the commission will shape crypto policy through the “notice and comment” process rather than relying on “regulation by enforcement.”

The SEC chair made this known through a June 3 remark to the Senate Appropriations Subcommittee on Financial Services. Atkins added that the commission will use “its existing authorities to set fit-for-purpose standards for market participants.”

Atkins noted that the SEC will focus on developing “a rational regulatory framework for crypto asset markets that establishes clear rules of the road for the issuance, custody, and trading of crypto assets while continuing to discourage bad actors from violating the law.”

This approach marks a departure from the previous SEC administration under Gary Gensler, which emphasized enforcement actions against crypto firms rather than formal rulemaking. As a result, Gensler faced significant criticism from the cryptocurrency industry.

Since taking over as SEC chair, Atkins has dropped lawsuits against several crypto firms and shifted the commission’s stance on crypto policy.

Atkins Plans for Crypto Policy

In the remark to the Senate subcommittee, Atkins disclosed that the SEC’s approach will be based on “Congress’s original intent, which is to police violations of these established obligations, particularly as they relate to fraud and manipulation.”

Atkins noted that the SEC will create rules that crypto firms have to follow to issue, trade and hold cryptocurrency. These rules are expected to offer “investor protection against fraud, not the least to help them identify scams that do not comport with the law.”

He added that his plans for the SEC will need “coordination across multiple offices and divisions within the Commission”, and as a result is pleased that two commissioners, Marky Uyeda and Hester Peirce, created the Crypto Task Force.

This marks a shift from the SEC’s previous approach of working in isolated policymaking silos to a more unified structure through the newly formed Crypto Task Force.

According to Atkins, the task force will enable various policy divisions within the commission to collaborate more efficiently and deliver long-overdue clarity and certainty to the American public.

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