The US Securities and Exchange Commission will hone its crypto policies with “notice and comment” and move away from shaping its rules through the courts, agency chair Paul Atkins told Congress.
In June 3 remarks to the Senate Appropriations Subcommittee on Financial Services, Atkins said the agency’s crypto policymaking “will be done through notice and comment rulemaking, not through regulation by enforcement.”
“The commission will utilize its existing authorities to set fit-for-purpose standards for market participants,” he added.
Atkins, a former crypto lobbyist, said that creating a “rational regulatory framework for crypto assets” will be a key priority for the SEC under his tenure.
Former SEC chair Gary Gensler was criticized by the crypto industry, which claimed he created crypto policy through lawsuits and legal settlements rather than rulemaking.
“The commission’s enforcement approach will return to Congress’s original intent, which is to police violations of these established obligations, particularly as they relate to fraud and manipulation,” Atkins said.
He added the SEC will establish “clear rules of the road” for the issuance, custody and trading of crypto while also discouraging bad actors from violating the law.
“Clear rules of the road are necessary for investor protection against fraud, not the least to help them identify scams that do not comport with the law,” he said.
Democrat Senator Chris Coons asked Atkins if he would endorse crypto exchanges handling traditional securities and digital tokens.
Atkins didn’t directly answer the question and instead said the agency’s Crypto Task Force is in the process of coming up with regulations “that make sense for the industry and that allow for innovation.”
Atkins previously appeared before lawmakers on May 20 and said the Crypto Task Force would release its first report in the next few months.
Related: SEC charges Unicoin crypto platform over alleged $100 million fraud
The agency’s Crypto Task Force was launched on Jan. 21 by acting SEC chair Mark Uyeda and was tasked with establishing a workable crypto framework for the agency to use.
SEC’s FinHub on the chopping block
Atkins also said he has sought approval from Congress to disband the agency’s Strategic Hub for Innovation and Financial Technology, which was launched in 2018 to focus on fintech-related fields.
“Innovation should be ingrained into the culture SEC-wide and not limited to a relatively small office,” Atkins said.
“The principles and priorities under which it was established are being integrated into the very fabric of the SEC.”
Since Gener resigned on Jan. 20, the SEC has adopted a different approach to crypto, dismissing long-running enforcement actions against crypto firms.
SEC staff have also released guidance around the most common crypto staking activities, saying they do not violate securities laws, as well as information about how federal securities laws could apply to crypto.
Magazine: SEC’s U-turn on crypto leaves key questions unanswered
