New SEC Boss Paul Atkins Will Transform Crypto Markets But Not Immediately

In a move that has delighted the crypto industry, President-elect Donald Trump has nominated pro-crypto businessman and former Securities and Exchange Commissioner Paul Atkins as the next chair of the regulatory agency under his administration. This appointment comes after Trump’s promise to replace current chair Gary Gensler, who has been criticized for being overly aggressive in regulating the crypto industry.

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Who is Paul Atkins?

Paul Atkins is a well-known proponent of digital assets and innovation. He served as a Republican SEC commissioner from July 2002 to August 2008, having been appointed to the role under George W. Bush. During his tenure at the SEC, Atkins emphasized the importance of "proportionality" in enforcement actions, advising against massive fines for corporations based on individual wrongdoing.

Atkins’ Familiarity with Current SEC Staff

One of the most promising things about Atkins is his pre-existing familiarity with the current SEC staff, including current Republican SEC Commissioners Hester "Crypto Mom" Peirce and Mark Uyeda. Both Peirce and Uyeda were staffers for Atkins during his six-year stint at the agency.

"When we look at how the commission is going to work, it’s not just about having a new commissioner," said Ho. "It’s also about the people who are working underneath him, and I think Paul Atkins has done a great job of bringing in some really talented individuals."

What Can We Expect from an Atkins-Led SEC?

Ho believes that Atkins will undoubtedly create "a lot of change" in the way the crypto industry is regulated. However, it’s unlikely that the United States will pursue a similar course to Europe in introducing an overarching regulatory regime like Markets in Crypto-Assets Regulation (MiCA).

Instead, Ho expects the Atkins-led SEC to be more focused on providing direction and removing regulatory roadblocks. "I would hazard a guess that Trump and Atkins are probably opposed to creating new regulations, but rather increasing the clarity as to where the crypto industry can operate."

Stablecoin Legislation and FIT 21

There are numerous crypto bills already up for consideration, including stablecoin legislation and FIT 21, which provides a regulatory framework for crypto and has already passed the House of Representatives. Whatever happens, Atkins is unlikely to follow his predecessor Gensler’s approach, which has been criticized for being overly aggressive to crypto regulation.

"The common theme in lawsuits like Coinbase and Ripple is that the SEC is overstepping its bounds," said Ho. "Technically, Congress is supposed to pass laws. Those laws delegate the authority to executive agencies like the SEC to interpret, but they are only supposed to interpret within the parameters that were delegated."

A Day-One Atkins Overhaul is Unlikely

Even though Atkins is clearly pro-crypto, Ho warned that industry pundits expecting a quick overhaul of the rules may be getting ahead of themselves. "There’s still a precedent set by Gensler for him to follow and just because a new commissioner is named, it doesn’t mean all the legal work and precedent that has come out previously is just gone."

Looking at the swathe of existing lawsuits from the SEC, including those against firms like Kraken, Coinbase, Ripple, and others, Ho said neither Atkins nor the agency are capable of simply dropping everything and hammering a pro-crypto position immediately.

"If Atkins wants to change the SEC’s position, he wouldn’t just be able to declare it as so. They would have to go through the legal process and have some justification in order to alter their claims," Ho said.

Conclusion

The appointment of Paul Atkins as the next chair of the SEC is a positive step for the crypto industry. With his pro-crypto stance and familiarity with current SEC staff, he is well-positioned to create change in the way the agency regulates digital assets. However, it’s unlikely that we will see a day-one overhaul of the rules, and instead expect a more focused approach on providing direction and removing regulatory roadblocks.

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