SEC Chair Criticizes Previous Administration’s Crypto Policy Approach

Securities and Exchange Commission (SEC) Chair Paul Atkins has criticized the previous leadership under former Chair Gary Gensler for its handling of crypto regulation. According to Atkins, the current SEC is now developing an “innovation exemption” aimed at encouraging the growth of on-chain products and services.

A former crypto lobbyist, Atkins spoke during a crypto roundtable held by the SEC’s Crypto Task Force called the American Spirit. He explained that he had directed the SEC staff to explore a framework for conditional exemption relief.

SEC Aims To Foster Crypto Innovation Through Flexible Regulatory Framework

This initiative would temporarily free certain firms from specific regulatory requirements as long as they meet defined conditions. The goal is to encourage innovation in new technologies by creating a faster path for launching on-chain financial tools and services. At the same time, the Commission evaluates potential updates to its existing rules.

Atkins said the proposed innovation exemption would support the vision of President Trump, who wants the United States to become the global center for crypto development. He emphasized that the exemption would give developers, entrepreneurs, and firms a way to work within a flexible system, provided they are willing to follow specific conditions and rules.

He also mentioned that the SEC staff had been asked to look into whether changes to the Commission’s current rules might be needed to support those building on-chain financial systems.

Atkins pointed out that most existing security regulations are built around overseeing issuers and intermediaries—such as broker-dealers, investment advisers, exchanges, and clearing agencies. These rules, he said, were created at a time when self-operating software, like smart contracts, didn’t exist and weren’t considered as potential replacements for traditional intermediaries.

SEC Wants To Establish Clearer Crypto Policies Through Reform

The SEC’s Crypto Task Force, now leading the agency’s crypto strategy, was formed under acting Chair Mark Uyeda with a mission to develop a practical regulatory framework for digital assets.

Atkins recently shared that the SEC will refine its crypto policies using a process based on public input—known as “notice and comment”—instead of relying on lawsuits and court decisions to create rules.

He had also appeared before lawmakers earlier and stated that the Crypto Task Force would release its first report within a few months.

At the crypto roundtable, Atkins repeated his criticism of the previous SEC leadership under Gary Gensler. He noted that the crypto community frequently accused Gensler of shaping policy through enforcement actions instead of formal rulemaking. Since Gensler stepped down, the SEC has shifted course by dropping several long-standing legal actions against crypto companies.

In addition, SEC staff have issued clear guidance on common crypto-staking practices, stating that these activities do not break securities laws. The agency has also offered information about how federal securities laws may apply to digital assets as part of its broader push to provide clarity and support for responsible innovation in the crypto space.