Will the Commission Make the U.S. a “Crypto Capital”
?In remarks delivered at the Crypto Task Force Roundtable on May 12, SEC Chair Paul Atkins may have launched a new day for crypto and the Commission (here). Chair Atkins appears to be focused on what he calls a goal “to be the ‘crypto capital of the planet” as envisioned by President Trump.” This apparently begins by returning to the traditional approach of developing what the Chair called “a rational regulatory framework for crypto asset markets that establishes clear rules of the road for the issuance, custody, and trading of crypto assets while continuing to discourage bad actors. . .” This approach contrasts sharply with, and will according to the Chair, eliminate the ad hoc enforcement action approach previously used.
The dawning of a new day in the crypto area centers on three points, according to Mr. Atkins. First, there is issuance. Here it is imperative that the “Commission . . . establish clear and sensible guidelines for distributions of crypto assets that are securities and sensible guidelines for distributions of crypto assets that are securities . ..” This approach contrasts with what the Chair called the prior “head-in-the-sand” approach or its follow-on shoot-first-and-ask-questions-later.”
The Chair is “committed to . . . charting a new course.” Under this approach the staff will continue to provide clarification of the rules “at my direction. . .” This approach will permit the Commission to exercise its “broad discretion under the securities acts to accommodate the crypto industry . . .” the Chair Atkins emphasized.
The second key point is “custody.” The Chair emphasized that he supports “providing registrants with greater optionality in determining how to custody crypto assets.” Emphasizing the importance of the custody issue, the Chair went on to note that the custody rules may need to be updated to allow advisers to engage in self-custody under certain circumstances.”
Third, Chair Atkins closed by discussing giving registrants broader authority and discretion in trading: “In am in favor of allowing registrants to trade a broader variety of products on their platforms and in response to market demand, activities which previous Commissions had prevented.” In this regard, the Chair would “like to explore” if conditional exemptive relief would be effective in exploring new products, products and services.
Under Chair Atkins perhaps the United States may become the “crypto capital of the planet” President Trump may favor; and he may become some kind of crypto czar.