The US Securities and Exchange Commission (SEC) chair continued steering the regulatory agency in a different direction than its previous enforcement-first policy toward the crypto industry.
In an interview with the Financial Times published Monday, SEC Chair Paul Atkins said the agency is departing from the aggressive enforcement actions common during the administration of former President Joe Biden and former SEC Chair Gary Gensler.
US cryptocurrency businesses can now expect preliminary notices of technical violations before any agency enforcement actions, Atkins told the FT.
“You can’t just suddenly come and bash down their door and say uh-uh, we caught you, you’re doing something and it’s a technical violation,” Atkins said, adding that businesses can now expect to first receive a preliminary notice.
The comments marked a sharp departure from the enforcement-heavy agenda of his predecessor, Gensler, who was often criticized for leading the agency’s approach to crypto of regulation by enforcement.
Under Gensler’s leadership, the SEC initiated lawsuits against some of the biggest companies in the industry, including suing Ripple Labs in 2020, Terraform Labs in 2022 and cryptocurrency exchanges Binance, Coinbase and Kraken in 2023. Those cases cost the industry billions in legal fees.
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Previous SEC enforcement actions were not “grounded in precedent,” Atkins said
Commenting on Gensler’s past enforcement actions, Atkins said that people “rightly criticised the SEC” in recent years because these decisions were “not grounded in precedent” or “predictability.”
“It would shoot first and then ask questions later,” Atkins said, adding that the regulator’s process should allow for a potential period of six months before enforcement actions are taken against businesses.
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He also distanced himself from Gensler’s earlier claims that most cryptocurrencies should be treated as securities. Atkins said most tokens do not fall under securities laws and that he intends to support trading of tokenized versions of stocks and bonds with the same legal rights as their underlying assets.
Atkins was confirmed as the new chair of the SEC in a 52–44 US Senate vote on April 9, Cointelegraph reported.
The SEC has since created a Crypto Task Force to consult with the industry on regulation and dropped several crypto-related investigations and enforcement actions undertaken during Gensler’s leadership.
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