Sec Chair Atkins says Crypto’s innovation “holds breath” in Roundtable

WASHINGTON – SEC Chairman Paul Atkins said Friday that innovation in the crypto industry has been “controlled for the past few years,” and that the change is very necessary.

“The market itself appears to indicate that current frameworks need caution,” Atkins said in a roundtable held by the SEC’s recently launched Cryptody Task Force.

The half-day session at the SEC headquarters in Washington, DC, was a prominent event for Atkins, coming just weeks after the SEC officially dropped its long-term lawsuit against Ripple, the iconic end of a four-year battle with regulators and the crypto industry. Crypto leaders, regulators and legal experts were on hand to discuss custody issues, or the protection of digital assets.

Atkins made his opening remarks along with SEC Commissioners Caroline Crenshaw, Mark Weda and Hester Perth. The group is trying to set the tone for a new era of cryptographic regulation. This is about to change the approach from hostile to collaborative work.

Atkins told reporters on the sidelines of the session that it was open to a wide reassessment of cryptography-related rules.

“I think we have a lot of ability to manipulate,” he said. “It’s always good to have Congressional views, and if there’s a law that supports what we’re doing, then better, but I think we have plenty of room to pilot.”

The crypto industry was important to President Donald Trump’s election victory in November, and after four turbulent years during Joe Biden’s presidency, he put money into his campaign, along with supporting congressional candidates deemed friendly to the efforts.

President Trump has since taken many steps to pay the industry, signed an executive order to create a strategic Bitcoin reserve, allowing three co-founders of Bitmex Global Cryptocurrency Exchange and Silk Road founder Ross Ulbricht.

The SEC followed suit. In January, Staff Accounting News 121 was withdrawn. This is a rule established under the previous Chair Gary Gensler who treated Crypto Holdings as a liability on the bank’s balance sheet and effectively blocked institutional adoption. Perth celebrated X’s rollback by writing, “Goodbye, goodbye sub 121! That wasn’t funny.”

Atkins said Friday that the SEC will continue to take action against foreign companies that have failed to comply with US rules, including listing Chinese companies when necessary.

And in February, the SEC issued guidance that it is not considered to be most meme coin securities under US federal law.

It is a great bounty for the president and his family, and he has multiple advantageous crypto projects in the market. President Trump’s personal memecoin – $Trump – was announced just before he took office in January and now has a market capitalization of around $2.7 billion. The project’s website claims that 80% of the token supply is held by the Trump organization and associated organizations.

When asked whether the president’s activities undermined the White House’s credibility on crypto policy, Atkins said, “I have not commented on it.”

Friday’s roundtable included executives from companies such as Anchorage Digital Bank, Fidelity Digital Assets, Kraken, Bitgo, Exodus, Fireblocks and Copper Technologies. They outlined legal and operational obstacles to provide crypto custody solutions compliant with federal securities laws.

Crypto Custody refers to how you hold digital assets. Some investors prefer to use “hot wallets” and other third-party options, using private keys stored in hardware wallets or private keys stored in “cold storage.”

Without clear regulatory guidelines, it becomes difficult to know which options are legal, creating challenges for providing safeguards in markets that see the share of hacking.

“The regulatory approach needs to recognize that there are differences between eligible custodians in some crypto assets,” Peirce said at an event Friday. “But for others, self-control may be a safer option.”

The SEC is weighing the controversial custody rules revisions first proposed under Gensler, which argues that much of the Crypto industry is infeasible with blockchain-based assets. The proposals are stuck, and Friday’s roundtable signal renewed interest in finding compromises.

Still, tensions remain between the need for investor protection and the practical reality of securing diversified assets.

“The committee must address these issues,” Perth said. “If we don’t, we will prevent the regulated entities from serving our customers.”

Watch: Trump’s World Liberty Financial Crypto Project says it sold $550 million tokens