New Chair Paul Atkins Says SEC Must Modernize to Support US Crypto Growth

New SEC Chair Paul Atkins is taking steps to reshape how crypto assets are regulated in the United States. Speaking during the SEC’s Crypto Task Force Roundtable on Tokenization, he outlined his plan to update outdated rules and create new frameworks that support innovation while protecting investors.

Good to know

• SEC Chair Paul Atkins plans to modernize crypto asset regulations for trading, issuance, and custody.
• The Commission may introduce new guidance, exemptions, and safe harbors for crypto projects.
• Atkins wants to update custody rules to include self-custody options for funds and advisers.

Paul Atkins made clear that the SEC needs to adapt to on-chain technology. He stated that current rules, written for traditional securities, do not work for blockchain-based assets.

“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,” Atkins said.

He has asked SEC staff to draft new guidelines for issuing crypto assets that qualify as securities or involve investment contracts. This may include new exemptions, safe harbor provisions, or registration alternatives to create legal pathways for crypto projects within U.S. borders.

Custody Rules May See Major Adjustments

The chair also discussed how funds and advisers manage crypto assets. Current SEC rules define what qualifies as a “qualified custodian,” and Atkins believes that those rules might not suit the crypto market.

He wants to explore updates that allow for self-custody in certain cases—especially when technology offers better asset protection than some existing custodians. He also acknowledged the need for clear exceptions to qualified custody requirements in common crypto practices.

“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,” Atkins explained. He emphasized the need to give advisers more flexibility while keeping security standards intact.

Atkins also supports modernizing how broker-dealers operate. Under current law, they can offer trading for both securities and non-securities, but practical limitations exist due to outdated frameworks.

“Nothing in the federal securities laws prohibits registered broker-dealers with an alternative trading system from facilitating trading in non-securities,” he said. He specifically pointed to options like pairs trading between securities and crypto tokens that may not qualify as securities.

He directed SEC staff to look into revising the alternative trading system (ATS) rules to make room for crypto-focused platforms offering both types of assets through a single interface.

Support for Innovation in U.S. Crypto Market

Atkins stressed that his long-term goal is to establish a rational and clear regulatory path for crypto businesses in the U.S. His approach focuses on flexibility, practical safeguards, and adapting to how crypto actually works in practice.

“We are committed to developing a rational regulatory framework for crypto asset markets that establishes clear rules of the road… while continuing to discourage bad actors from violating the law,” Atkins said.

His leadership could bring major changes to how crypto companies launch tokens, store assets, and operate platforms—all aimed at making the U.S. more competitive in the evolving global market.