SEC Chair Announces Shift Toward Preliminary Notices in Crypto Enforcement
Paul Atkins, the new chair of the US Securities and Exchange Commission (SEC), has outlined a significant change in the agency’s approach to cryptocurrency regulation. In an interview with the Financial Times, Atkins emphasized that crypto businesses will now receive preliminary notices of technical violations prior to any enforcement actions, marking a departure from the SEC’s previous aggressive tactics.
Moving Away from Enforcement-First Strategy
Atkins criticized the enforcement-heavy stance under former SEC Chair Gary Gensler, which involved lawsuits against major crypto firms such as Ripple Labs, Terraform Labs, Binance, Coinbase, and Kraken. These legal battles resulted in substantial costs for the industry. Atkins described past SEC actions as lacking clear precedent and predictability, stating, “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.” He suggested that a period of up to six months for preliminary notices should precede enforcement.
Reevaluating Crypto Classification
Distancing himself from Gensler’s earlier position that most cryptocurrencies should be classified as securities, Atkins indicated his belief that most tokens do not fall under securities laws. He expressed support for the regulated trading of tokenized versions of stocks and bonds that carry the same legal rights as their underlying assets.
Regulatory Engagement and Industry Impact
Since his confirmation by the Senate on April 9, Atkins has overseen the creation of an SEC Crypto Task Force aimed at industry consultation. The agency has also dropped several investigations initiated during the previous administration, signaling a more collaborative regulatory environment.
Atkins’ approach suggests a regulatory framework favoring dialogue and compliance assistance over immediate punitive measures, potentially reducing legal uncertainties for crypto businesses.
FinOracleAI — Market View
The SEC’s shift toward issuing preliminary notices before enforcement actions is likely to be viewed positively by the cryptocurrency market in the short term. This approach reduces regulatory unpredictability and legal risk, which have previously weighed heavily on crypto firms. However, the long-term impact will depend on how consistently this policy is applied and whether substantive regulatory clarity follows. Market participants should monitor further SEC guidance and enforcement patterns to assess evolving compliance expectations.
Impact: positive
