OKG Research: "Crypto Daddy" Arrives! Can the SEC under Paul Atkins reshape the U.S. crypto market?

The author of this article is Jason Jiang, Senior Researcher at OKG Research

On April 22, 2025 (UTC/GMT+08:00), Paul Atkins was officially sworn in as the 34th Chairman of the U.S. Securities and Exchange Commission (SEC).Nominated by President Trump and confirmed by the Senate with a vote of 52 to 44, this “free-market” regulator, unlike his predecessor Gary Gensler, who focused primarily on enforcement during his tenure, made it clear upon taking office that building a clear and open regulatory framework for digital assets would be his “top priority.”

During the Gensler era, the U.S. SEC launched large-scale enforcement actions against the crypto industry, treating nearly all tokens as securities, which left entrepreneurs, investment firms, and exchanges in a state of prolonged uncertainty and risk.Against this backdrop of regulatory pressure and policy ambiguity, Atkins’ appointment is seen by the industry as a “reboot moment” for U.S. crypto regulation.

From traditional regulator to “crypto veteran”

Paul Atkins is a typical “Washington-Wall Street insider.”He graduated from Wofford College and Vanderbilt Law School, and early in his career worked at the prestigious Wall Street law firm Davis Polk, handling securities offerings, mergers, and acquisitions, while also gaining international experience in Paris.In the early 1990s, he joined the SEC, where he served as a senior advisor to two former chairmen, focusing on corporate governance and market structure reforms, among other issues.

In 2002, Atkins was appointed as an SEC Commissioner by then-President George W. Bush.Before stepping down in 2008, he was known for advocating transparent regulation and opposing bureaucratic expansion, making him one of the key figures representing the U.S. free-market regulatory philosophy.In 2009, he founded the compliance consulting firm Patomak Global Partners, providing compliance strategy services to financial institutions and crypto companies.

During the establishment of Patomak, Atkins developed deep connections with the crypto industry.Atkins served as the co-chair of the “Token Alliance” under the Digital Chamber of Commerce, leading the development of best practices for token issuance and crypto platforms.He also provided strategic consulting for well-known crypto companies such as Securitize and Anchorage Digital, and invested in the crypto asset fund Off The Chain Capital.Financial disclosures reveal that his family’s crypto-related assets total in the millions of dollars.

These experiences have made Atkins one of the few traditional regulators with both theoretical knowledge and practical experience in the crypto industry.However, Atkins’ background in crypto has also sparked controversy.Prior to the FTX collapse, Patomak had provided compliance advisory services to the firm, which became one of the points of controversy during his nomination process.Despite this, the Senate majority ultimately supported his nomination, reflecting not only recognition of his professional capabilities but also a shift in the U.S. political climate towards more relaxed crypto regulation.

Regulation should not be the enemy of innovation

Unlike the regulatory approach of “litigation-driven industry governance” during the Gensler era, Atkins made it clear during his confirmation hearings and on his first day in office that the SEC’s mission should shift from “defining rules through enforcement” to “guiding compliance through rules.”

He believes that regulation should not stifle innovation, nor should it allow the market to linger in legal grey areas for extended periods.”Regulation should not be the enemy of innovation,” but should offer “rational, clear, and enforceable compliance pathways.” This is the first key message he has sent to the entire crypto industry.

Atkins criticized his predecessor’s “one-size-fits-all” approach of treating cryptocurrencies as securities, which led the market into a vicious cycle of “being sued first, finding rules later.In contrast, he prefers to build a more flexible and adaptable regulatory classification system based on dimensions such as token functionality and decentralization.He also pointed out that “the U.S. should not lose its competitive edge in the Web3 era due to regulatory uncertainty.This aligns closely with the long-standing calls from the crypto community, developers, and even some institutional investors.

Since the Senate confirmed Atkins as Chairman on April 9, a series of actions by the SEC have already made the crypto industry noticeably feel a shift in regulatory directionwith some industry insiders humorously dubbing the regulator as the “crypto daddy”:

1. Initiating Dialogue with the Crypto Industry.

In order to quickly fill the regulatory gap and reach an industry consensus, the SEC’s cryptocurrency working group plans to host four public roundtable discussions between April and June this year, covering key topics such as exchange regulation, custody standards, DeFi compliance, and asset tokenization, inviting industry representatives, consumer organizations, and policy researchers to discuss regulatory pathways.This marks the first time in SEC history that a systematic policy consultation mechanism has been established on crypto issues, demonstrating that the SEC under Atkins’ leadership aims to replace confrontation with cooperation by listening to industry voices and promptly adjusting policy priorities.

The first roundtable on April 11 focused on “Tailored Regulation for Crypto Exchanges,” discussing how to adjust the rules within the existing securities law framework to accommodate crypto exchanges.

2. Large-scale settlements or dismissals of ongoing litigation cases

Since Atkins took office, the SEC’s approach to ongoing crypto litigation cases has noticeably softened.On April 11, the SEC reached a long-term settlement with Ripple, reducing the fine to $50 million, and XRP was not definitively classified as a security.At the same time, lawsuits against several projects, including Nova Labs, were directly dismissed, with the industry referring to this as the “regulatory amnesty wave.This “course correction” sends a clear signal: the SEC will retroactively adjust the overzealous crypto enforcement actions from the previous administration, aiming to resolve lingering disputes through negotiations and provide the industry with breathing room on policy.

3. Initial standards for crypto disclosures take shape

Also on April 11, the SEC’s Division of Corporation Finance released non-binding disclosure guidelines for crypto token issuances, covering project structure, token functionality, governance design, and development progress.This marks the SEC’s first attempt to provide a “list of expected disclosures” for crypto projects, signaling a shift in its regulatory approach from “post-enforcement” to “pre-guidance.”“Crypto Mom” Hester Peirce remarked that this reflects the SEC under the new chairman’s willingness to “step in and guide,” rather than letting the industry navigate perilously on its own.

These shifting measures indicate that the SEC under Atkins’ leadership is moving from the past “high-pressure control” approach to a model of “transparent co-governance.”Rather than describing this as regulatory loosening, it is more accurate to say that regulatory rationality is returning, back to the original mission of serving the market, protecting investors, and encouraging innovation.

The three key issues will become the top priorities of Atkins’ new crypto policies

After signaling an initial friendly approach, the industry is widely focused on the next key policy directions under Atkins’ leadership of the SEC.Currently, the market is generally focused on three main areas:

1. Accelerating Stablecoin Legislation

Trump has repeatedly publicly supported the introduction of a regulated U.S. dollar-backed stablecoin to increase demand for U.S. Treasury bonds and reinforce the dollar’s dominance in the digital age.Atkins has expressed support for the “GENIUS Act” proposed by Senator Bill Hagerty, which establishes a basic framework for stablecoin licensing, reserve requirements, and information disclosure,and has suggested providing state-level exemption pathways for small to medium-sized projects.During his tenure, the SEC may gradually withdraw from direct intervention in “non-security stablecoins” (such as USDC), shifting the regulatory focus to banking regulators or legislative bodies for unified oversight.This will remove key obstacles to the large-scale, legal, and compliant use of stablecoins and help advance the development of the U.S. digital dollar ecosystem.

2. The path for compliant exchange registration is expected to be cleared

Over the past two years, exchanges such as Coinbase have faced SEC lawsuits for “operating an unregistered securities trading platform.”Atkins advocates for establishing a dedicated compliance framework for such platforms, such as allowing registration as an “Alternative Trading System” (ATS) or “crypto-specific broker-dealer.”According to sources cited by The Block, several dismissals are currently being prepared, and the Coinbase case may also be resolved without litigation, creating space for future compliance pathways.More importantly, the SEC may no longer attempt to centralize regulation, but instead coordinate with agencies like the CFTC and FinCEN to establish a “clearly defined division of responsibilities” multi-agency regulatory framework, providing exchanges and their users with a more predictable environment.

3. Token classification standards will be reshaped

One of the most challenging issues in the crypto market today is determining which tokens are securities and which are commodities or non-regulated assets.In the past, the SEC broadly applied the Howey test to classify tokens as securities, whereas Atkins prefers a classification approach based on token functionality (utility vs. investment) and the degree of decentralization.He supports the “Safe Harbor Proposal” put forward by Commissioner Hester Peirce, which grants startup projects a three-year grace period to build their distributed networks without fearing legal action from the SEC.This means that a dual-track system of “startup exemption + long-term compliance” could take shape, revitalizing the token issuance and fundraising ecosystem.At the same time, Atkins supports the “issuance and disclosure” principle, meaning that as long as token projects provide full information disclosure and have a transparent governance structure at the time of issuance, they can operate within a compliance framework.This could significantly alleviate the compliance burden on project teams and attract a new wave of token fundraising projects back to the U.S. market.

In addition, the newly established internal research group at the SEC is re-evaluating the attributes of major blockchain assets,including tokens like XRP and SOL, which have a broad application base. If excluded from being classified as securities, this would open the door for more varieties of crypto ETFs.In fact, on Atkins’ first day in office (April 10), the SEC quickly approved options trading for the Ethereum spot ETF,providing investors with more avenues to participate and signaling support for the financialization of crypto assets.

Conclusion

Paul Atkins’ appointment marks the beginning of a new regulatory era for the crypto industry in the U.S.If key issues such as stablecoin compliance channels, exchange registration systems, and token legal classification can be resolved during his tenure, it will reshape the U.S.’s position in the global crypto governance framework.More importantly, the change in regulatory logic will send a stronger institutional signal: it is not less regulation, but regulation that is clearer, more collaborative, and more constructive.

For the crypto industry, this is a hard-earned respite and a reboot that requires more rationality and self-discipline.

However, Atkins is not a “laissez-faire” advocate. In multiple speeches, he has reiterated that the SEC will continue to take a tough stance against fraud, insider trading, market manipulation, and other illegal activities;The real shift lies in showing the industry “where the path to compliance is.”

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