SEC Chairman Paul Atkins Says Crypto Task Force To Address Trading, Custody and Tokenization

SEC Chairman Paul Atkins testifies during the Senate Appropriations Subcommittee on Financial Services and General Government hearing. Photo by Tom Williams/CQ-Roll Call, Inc via Getty Images.

Key Takeaways

• SEC Chairman Paul Atkins addressed the Senate Appropriations Subcommittee on Tuesday, June 3.
• Discussing crypto regulation, Atkins said: “policymaking will be done through notice and comment rulemaking not through regulation-by-enforcement.”
• He confirmed that the SEC’s crypto task force has held roundtables to discuss crypto trading, custody and tokenization.

In his first significant speech to Congress as Chairman of the Securities and Exchange Commission (SEC), Paul Atkins shared updates on the agency’s new crypto task force and vowed to move quickly to establish “long-needed clarity and certainty” for the industry.

Addressing the Senate Appropriations Subcommittee to request the SEC’s budget for the year, Atkins said the task force has already held four roundtables.

Topic commissioners discussed include the security status of crypto, how to regulate crypto trading, and the regulatory treatment of custody and tokenization.

Paul Atkins Addresses the Senate

Atkins assumed the SEC chairmanship at a time of significant change for the agency under the administration of Donald Trump.

Speaking on Tuesday, Atkins said he supports Trump’s request of $2.149 billion for SEC operations for the 2025 fiscal year.

Although the budget request remains unchanged from the previous two years, Atkins said it is actually $100 million more than the agency requires to maintain its “current state of operations.”

The discrepancy is attributed to funds needed to pay departing staff members who took advantage of the Trump administration’s buyout offer.

Through the government’s voluntary resignation incentives, the SEC has decreased its headcount by 15% since the beginning of the current fiscal year, Atkins said.

“Notice and Comment” To Replace “Regulation by Enforcement”

Turning his attention to crypto regulation, Atkins vowed that: “policymaking will be done through notice and comment rulemaking not through regulation-by-enforcement.”

His comments reflect the crypto industry’s widespread dissatisfaction with the SEC’s approach under the leadership of Gary Gensler.

During the Gensler era, “regulation-by-enforcement” became a byword for the SEC’s strategy of filing lawsuits against crypto firms for conducting alleged unregistered securities offerings.

Going forward, “the Commission’s enforcement approach will return to Congress’ original intent, which is to police violations of established obligations, particularly as they relate to fraud and manipulation,” Atkins stated.

Crypto Task Force Roundtables

Shortly after Trump’s inauguration in January, Acting SEC Chairman Mark T. Uyeda announced the formation of a “crypto task force” to help establish rules of the road for the crypto industry.

Led by Commissioner Hester Pierce, the task force has determined that the majority of crypto assets should not be subject to securities law, at least not when they are traded on the open market.

However, that still leaves the important question of when token sales might count as an “investment contract” and therefore require SEC oversight.

With crypto companies like Ripple lobbying to influence the SEC’s position on the matter, Atkins confirmed that “the task force has held four roundtables so far on further defining security status.”

Other issues the task force has discussed include “tailoring regulation for crypto trading, custody considerations, and tokenization.” Meanwhile, the SEC will turn its attention to decentralized finance during the next roundtable, he added.