- SEC Chair Paul Atkins condemned the Gensler-era crackdown on crypto as overreaching and harmful to innovation, especially around staking and self-custody.
- He argued that staking regulation needs explicit congressional approval and defended self-custody as a core American right that should not be obstructed by the SEC.
- Atkins also proposed a new pro-innovation framework to protect crypto projects from premature enforcement, therefore encouraging experimentation without fear of the agency knocking on their doors.
SEC Chair Paul Atkins took direct aim at his predecessor’s crypto legacy during a roundtable discussion Monday, framing the previous administration’s approach as legally aggressive and innovation-stifling.
Speaking at the SEC’s latest digital asset policy event, “DeFi and the American Spirit”, Atkins criticised the infamous Gensler-era crackdown (known as regulation by enforcement) on staking, self-custody, and basically all things crypto, claiming it overstepped regulatory bounds and failed to reflect foundational market freedoms.
Unfortunately, the prior administration undermined innovation in self-custodial digital wallets and other onchain technologies by asserting through regulatory actions that the developers of such software may be conducting brokerage activities.
Paul Atkins, SEC ChairmanSEC Chair: Regulatory Guidance Needed, Not Enforcement
Atkins argued that staking policy, in particular, requires explicit congressional backing if it’s to have lasting legitimacy, not enforcement through litigation. Regarding self-custody, he mentioned that it aligns with “foundational American values” and said the SEC should not obstruct individuals from holding and deploying their assets directly, without intermediaries.
I’m in favor of affording greater flexibility to market participants to self-custody crypto assets, especially where intermediation imposes unnecessary transaction costs or restricts the ability to engage in staking and other onchain activities.
Paul Atkins, SEC ChairmanThe roundtable was the fifth hosted by the SEC’s crypto task force this year. Previous sessions focused on asset classification and custodial frameworks, but it looks like Atkins used this one to draw a line in the sand regarding self-custody, staking, and avoiding the SEC from overstepping again (hopefully).
In closing, he called for the creation of an “innovation exemption” that would grant provisional relief to projects experimenting with on-chain financial products. The move, he said, would allow legitimate development to proceed without being immediately subject to enforcement or retroactive classification.
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