The new chair of the U.S. Securities and Exchange Commission (SEC) says he’s prioritizing developing new regulations for crypto asset issuance, custody and trading.
Paul Atkins, who was sworn in as SEC Chair in April, spoke at the Commission’s Crypto Task Force Roundtable on Tokenization this week.
The new chair says the SEC’s “legacy rules and regulations” don’t contemplate the novel use cases of blockchain technology.
“In order for the United States to be the ‘crypto capital of the planet’ as envisioned by President Trump, the Commission must keep pace with innovation and consider whether regulatory changes are needed to accommodate on-chain securities and other crypto assets. Rules and regulations designed for off-chain securities may be incompatible with or unnecessary for on-chain assets and stifle the growth of blockchain technology.
A key priority of my Chairmanship will be to develop 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.”
In terms of issuance, Atkins says he will direct SEC officials to draft “clear and sensible guidelines” for distributions of crypto assets that are securities or subject to an investment contract.
“I have asked the Commission staff to consider whether additional guidance, registration exemptions, and safe harbors are needed to create pathways for crypto asset issuances within the United States. I believe that the Commission has broad discretion under the securities acts to accommodate the crypto industry, and I intend to get it done.”
He also wants to provide “greater optionality” in terms of how to custody crypto.
“It is important to provide clarity on the types of custodians that qualify as a ‘qualified custodian’ under the Advisers Act and Investment Company Act, as well as reasonable exceptions from the qualified custody requirements to accommodate certain common practices within crypto asset markets. Many advisers and funds have access to self-custodial solutions that incorporate more advanced technology to safeguard crypto assets as compared to some of the custodians in the market. Consequently, the custody rules may need to be updated to allow advisers and funds to engage in self-custody under certain circumstances.”
Additionally, the new SEC chair says he supports broker-dealers that want to offer securities and non-securities trading and other financial services all in the same app.
“Nothing in the federal securities laws prohibits registered broker-dealers with an alternative trading system from facilitating trading in non-securities, including via ‘pairs trading’ between securities and non-securities. I have asked the staff to help us devise ways to modernize the ATS (alternative trading system) regulatory regime to better accommodate crypto assets.”
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