Chairman of the Securities and Exchange Commission (SEC) Paul Atkins looks on during his swearing-in ceremony, at the White House in Washington, D.C., U.S., April 22, 2025.
Kevin Lamarque | Reuters
WASHINGTON — SEC Chair Paul Atkins said on Friday that innovation in the crypto industry “has been stifled for the last several years,” and that changes are sorely needed.
“The market itself seems to indicate that the current framework badly needs attention,” Atkins said at a roundtable held by the SEC’s recently launched Crypto Task Force.
The half-day session at the SEC’s headquarters in Washington, D.C., is a notable event for Atkins, and comes just weeks after the SEC formally dropped its long-running lawsuit against Ripple, a symbolic end to a four-year battle between the regulator and the crypto industry. Crypto leaders, regulators and legal experts were on hand to primarily discuss the issue of custody, or the safeguarding of digital assets.
Atkins delivered the opening remarks alongside SEC Commissioners Caroline Crenshaw, Mark Uyeda, and Hester Peirce. The group is attempting to set the tone for a new era of crypto regulation, one that seeks to change the approach from adversarial to collaborative.
The crypto industry was critical to President Donald Trump’s election victory in November, pumping money into his campaign as well as supporting congressional candidates viewed as friendly to its efforts, following a tumultuous four years during Joe Biden’s presidency.
President Trump has since taken numerous steps to pay the industry back, signing an executive order to create a strategic bitcoin reserve and pardoning three co-founders of the BitMEX global cryptocurrency exchange as well as Silk Road founder Ross Ulbricht.
The SEC has followed suit. In January, it rescinded Staff Accounting Bulletin 121, a rule established under prior Chair Gary Gensler that treated crypto holdings as balance sheet liabilities for banks and effectively blocked institutional adoption. Peirce celebrated the rollback on X at the time writing, “Bye, bye SAB 121! It’s not been fun.”
And in February, the SEC issued guidance saying it doesn’t deem most meme coins securities under U.S. federal law.
That’s a big boon to the president and his family members, who have multiple lucrative crypto projects on the market. President Trump’s personal meme coin — $TRUMP — was announced just before the inauguration in January and currently has a market cap of about $2.7 billion. The project’s website claims that 80% of the token supply is held by the Trump Organization and affiliated entities.
The Friday roundtable included executives from firms including Anchorage Digital Bank, Fidelity Digital Assets, Kraken, BitGo, Exodus, Fireblocks and Copper Technologies. They outlined the legal and operational roadblocks to offering crypto custody solutions that comply with federal securities laws.
Crypto custody refers to how the digital assets are held. Some investors prefer to custody their own holdings with private keys stored on hardware wallets, or “cold storage,” versus using crypto brokerage firm — “hot wallets” — and other third-party options.
A lack of clear regulatory guidelines makes it difficult to know which options are legal, and also creates challenges to providing safeguards in a market that’s seen its share of hacks.
“A regulatory approach should recognize the differences across qualified custodians exist for some crypto assets,” Peirce said, at Friday’s event. “But for others, self custody might be the safer option.”
The SEC is weighing revisions to its controversial custody rule, first proposed under Gensler, which many in the crypto industry argue was unworkable for blockchain-based assets. The proposal stalled, and Friday’s roundtable signals renewed interest in finding a compromise.
Still, tensions remain between the need for investor protections and the practical realities of securing decentralized assets.
“The Commission must grapple with these issues,” Peirce said. “If we fail to do so, we prevent regulated entities from serving their customers.”
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