Attorney Atkins officially assumes position as Chair of the Securities and Exchange Commission (SEC)
Paul Atkins, the newly appointed SEC Chair, has kicked off an ambitious initiative called "Project Crypto." This comprehensive undertaking aims to update the U.S. regulatory framework for digital assets, marking a significant step towards regulatory clarity and innovation in crypto oversight.
In his plans for crypto custody and broader digital asset regulations, Atkins intends to:
- Draft clear and simple rules for crypto asset distributions, custody, and trading, moving away from the previous administration’s broad enforcement stance. Atkins has made it clear that most crypto assets are not securities, signaling a narrower application of securities laws to facilitate innovation and capital formation in the U.S.
- Adapt and modernize the SEC’s custody requirements to better accommodate crypto assets. Recognizing that traditional custody rules were not designed with digital assets in mind, Atkins has directed staff to explore potential exemptions, rule modifications, or other relief to support intermediaries and investors relying on custodians.
- Collaborate closely with the SEC Crypto Task Force, led by Commissioner Hester Peirce, to swiftly implement regulatory improvements recommended by the President’s Working Group on Digital Asset Markets (PWG Report). The goal is to make the U.S. the “crypto capital of the world.”
- Promote a regulatory environment that supports multifunctional crypto platforms (“super-apps”) and removes outdated barriers preventing large institutions from fully participating in digital asset markets under efficient licensing structures.
Atkins's plans for the crypto custody roundtable and broader regulations focus on crafting a clear, innovation-friendly framework. This includes modernizing custody rules, clarifying the status of digital assets regarding securities laws, and facilitating the integration of blockchain on U.S. financial markets, consistent with the PWG blueprint and legislative initiatives like the GENIUS Act.
The pendulum in digital asset regulation might swing in a direction that offers more clarity for the crypto community, but the extent of this change is not specified. The absence of digital asset custody opportunities for banks blocked their participation in the launch of spot Bitcoin ETFs in early 2024. This gap has led to digital securities, such as digital bonds, being more prevalent in Europe and Asia due to the regulatory environment in those regions.
After leaving the SEC, Atkins founded Patomak Global Partners, a firm providing strategy, advisory services, compliance, and litigation support. Digital asset clients of Patomak Global Partners include the Chamber of Digital Commerce, FTX, SolidX, and Van Eck.
Atkins was sworn in as the SEC Chair, but the exact date is not specified. During his confirmation hearing, he stated that a top priority of his chairmanship will be to provide a firm regulatory foundation for digital assets. Atkins might make his first public appearance as SEC Chair at the SEC roundtable on crypto custody scheduled for April 25. The US Senate approved his appointment on April 9.
Sources: [1] Coindesk: SEC Chair Paul Atkins Launches 'Project Crypto' to Modernize U.S. Digital Asset Regulations [2] Cointelegraph: New SEC Chair Paul Atkins Announces 'Project Crypto' to Modernize U.S. Digital Asset Regulations [3] Yahoo Finance: SEC Chair Paul Atkins Unveils 'Project Crypto' to Modernize U.S. Digital Asset Regulations [4] Wall Street Journal: SEC Chair Paul Atkins Outlines Plans for Crypto Custody and Broader Regulations [5] Bloomberg: SEC Chair Paul Atkins's 'Project Crypto' Aims to Make U.S. the 'Crypto Capital of the World'
- In his role as SEC Chair, Paul Atkins aims to establish clear and straightforward rules for digital asset distribution, custody, and trading, as part of Project Crypto.
- Atkins intends to modernize the SEC's custody requirements to accommodate digital assets, with a focus on potential exemptions, rule modifications, or other relief for intermediaries and investors.
- Atkins plans to collaborate with the SEC Crypto Task Force and the President's Working Group on Digital Asset Markets to implement regulatory improvements, with the ultimate goal of making the U.S. the global leader in crypto.
- Atkins' plans for Project Crypto include promoting a regulatory environment that supports multifunctional crypto platforms and removing outdated barriers preventing large institutions from participating in digital asset markets.
- Atkins, after leaving the SEC, founded Patomak Global Partners, a firm that provides digital asset clients with strategy, advisory services, compliance, and litigation support.
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