Regulator pledges balance between enforcement and innovation in digital assets
The U.S. Securities and Exchange Commission (SEC) Chair Paul Atkins has signaled that the agency will continue to enforce existing financial laws while also creating clearer rules for the crypto sector. Speaking at Georgetown University this week, Atkins responded to concerns over potential conflicts of interest in cryptocurrency markets linked to political figures.
Conflicts of interest under scrutiny
A student asked Atkins about recent reports involving World Liberty Financial (WLF), a crypto firm backed by members of the Trump family. The company came into focus after revelations that a UAE-based investment group funneled billions into digital assets, in part through WLF’s stablecoin project.
Atkins responded cautiously, saying the SEC’s role is clear. “If there are conflicts of interest, we’ll attempt to root them out, but lay down standards,” he said. He added that while the agency does not currently regulate WLF directly, “There are statutes, and so we will enforce those laws and investigate where it’s indicated and necessary.”
A new regulatory approach
Since assuming leadership in April, Atkins has shifted the SEC’s tone compared to his predecessor. Instead of leaning solely on enforcement, he has emphasized regulatory clarity and innovation support.
- The “innovation exemption” plan, expected by year’s end, would allow firms to bring blockchain products to market more quickly.
- The SEC is also working on Project Crypto, an initiative to modernize outdated securities rules for digital assets.
- Recent guidance clarified that most proof-of-stake systems do not fall under securities laws, reducing uncertainty for Ethereum and similar networks.
Atkins explained that the agency is focused on building a clear foundation for crypto rules so that businesses and attorneys know how tokens are classified. “That’s the kind of groundwork that gives certainty,” he noted.
The SEC’s dual strategy highlights a turning point: stronger enforcement where needed, but also a push to encourage responsible innovation. The coming months, particularly the rollout of the innovation exemption, will show how effectively the agency balances investor protection with technological growth.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.