WASHINGTON, D.C. — U.S. Securities and Exchange Commission (SEC) Chair Paul S. Atkins called for urgent regulatory modernization to accommodate blockchain-based securities during his keynote speech at the Cryptocurrency Working Group’s Tokenization Roundtable on Tuesday.
Atkins likened the shift from traditional securities to on-chain systems to the digital revolution in the music industry, arguing that tokenization could unlock unprecedented efficiency, liquidity, and innovation in capital markets.
On-Chain Securities: A Paradigm Shift
Atkins emphasized that blockchain technology enables programmable securities—such as automated dividend distributions via smart contracts—and could transform illiquid assets into tradable opportunities. However, he warned that outdated regulations risk stifling progress.
“The SEC’s current framework, designed for off-chain securities, may be incompatible with on-chain assets,” he said. “To realize President Trump’s vision of the U.S. as the ‘crypto capital of the planet,’ we must align policy with technological advancement.”
Three-Pronged Regulatory Overhaul
Atkins outlined priorities for crypto asset regulation:
Issuance Clarity
Only four crypto asset issuers have registered under existing SEC guidelines, citing overly burdensome disclosure requirements (e.g., Form S-1 demands for executive compensation details irrelevant to crypto investors).
The SEC will revisit registration exemptions and safe harbors to better suit crypto assets, moving beyond what Atkins termed an outdated “shoot first, ask later” enforcement approach.
Custody Flexibility
The recent repeal of Staff Accounting Bulletin No. 121 removed barriers to crypto custody services, but Atkins criticized the move as ad hoc. He urged formal rulemaking to define “qualified custodians” and allow self-custody solutions for advisors and funds.
Trading Modernization
Broker-dealers should be permitted to trade a broader range of crypto products, including integrated “super apps” for securities and non-securities. The SEC is exploring updates to Alternative Trading System (ATS) rules to accommodate crypto assets.
Collaborative Approach
Atkins praised the newly formed Cryptocurrency Task Force—led by Commissioners Uyeda and Peirce—for ending “fragmented policymaking” at the SEC. He also pledged to work with Congress and the Trump administration to ensure the U.S. remains a global crypto leader.
“Market participants shouldn’t have to flee overseas to innovate,” he said, hinting at potential conditional exemptions for experimental products that don’t fit current rules.
Investor Protection Remains Key
While advocating for flexibility, Atkins stressed that clear rules are critical to combat fraud and manipulation. “Our enforcement will focus on upholding congressional intent—protecting investors from bad actors,” he added.
The SEC’s forthcoming guidance is expected to address lingering ambiguities around crypto securities, custody, and trading by year-end.
Related Topics:
- The Australian Exchange has requested the High Court to clarify its ruling on the legal application of crypto asset income products
- Nasdaq-listed company BTCS added 8.4 million Ether to the company’s liquidity pool
- Hong Kong has passed a stablecoin bill to establish a licensing system in response to global competition
