The chair of the US Securities and Exchange Commission (SEC) has been steering the agency in a new direction, moving away from its prior enforcement-first strategy regarding the crypto sector.
In an interview with the Financial Times published on Monday, SEC Chair Paul Atkins indicated that the agency is shifting away from the strong enforcement stance typical during the tenure of former President Joe Biden and former SEC Chair Gary Gensler.
US cryptocurrency firms can now anticipate receiving preliminary notices about minor violations before any enforcement measures are taken, Atkins informed the FT.
“You can’t just suddenly barge in and say uh-uh, we caught you, you’re in violation,” Atkins stated, emphasizing that businesses will now receive a preliminary notice first.
These remarks represent a significant shift from the enforcement-driven approach of his predecessor, Gensler, who faced criticism for his regulation-by-enforcement strategy concerning crypto.
Under Gensler’s leadership, the SEC filed lawsuits against some major players in the industry, including Ripple Labs in 2020, Terraform Labs in 2022, and cryptocurrency exchanges Binance, Coinbase, and Kraken in 2023. These legal actions incurred billions in costs for the industry.
Related: Trump-linked WLFI’s 40% decline causes millions in losses for crypto whales: Finance Redefined
Atkins stated that previous SEC enforcement actions lacked “precedent”
Discussing Gensler’s past actions, Atkins mentioned that people “rightly criticized the SEC” in recent years due to decisions being “not grounded in precedent” or “predictability.”
“It would shoot first and then ask questions later,” Atkins remarked, highlighting that the regulatory process should allow for a potential six-month period before any enforcement actions occur against businesses.
Related: London Stock Exchange launches blockchain platform for private funds
He also distanced himself from Gensler’s assertions that most cryptocurrencies should be classified as securities. Atkins noted that most tokens do not meet securities law criteria and expressed his intention to endorse trading of tokenized versions of stocks and bonds that hold the same legal rights as their underlying assets.
Atkins was confirmed as the SEC chair in a US Senate vote of 52–44 on April 9, according to Cointelegraph.
Since then, the SEC has established a Crypto Task Force to engage with the industry regarding regulation and has discontinued numerous crypto-related investigations and enforcement actions that were in progress during Gensler’s tenure.
Magazine: SEC’s U-turn on crypto leaves key questions unanswered
