- Paul Atkins pledges advance notice for technical violations instead of immediate action
- New SEC approach contrasts sharply with Gary Gensler’s enforcement-first strategy
- Atkins aims to make the US as the crypto capital while developing tokenized securities rules
Securities and Exchange Commission Chair Paul Atkins has announced a fundamental shift away from the aggressive enforcement practices that characterized the Biden administration. Speaking to the Financial Times, Atkins shared his intention to provide businesses with a warning on technical violations before pursuing enforcement actions.
The Trump-appointed regulator emphasized that while the SEC will continue targeting serious financial crimes, the agency will adopt a more collaborative approach for lesser infractions. Atkins stated that companies deserve notice rather than sudden enforcement actions for technical violations, marking a clear departure from previous regulatory tactics.
Criticism of Previous SEC Leadership
Atkins directed sharp criticism toward his predecessor, Gary Gensler’s enforcement methodology, arguing that the previous administration operated without adequate precedent or predictability. He further added that Gensler’s approach resembled “shooting first and asking questions later,” creating market uncertainty about due process and the rule of law.
The SEC leader specifically condemned the billions in fines imposed on financial institutions for record-keeping violations under Gensler’s tenure. Atkins characterized this practice as formulaic revenue-based invoicing rather than an appropriate regulatory response, arguing that such industry-wide issues should have been addressed through systematic rule clarification.
Atkins advocates for a more educational approach, comparing proper regulatory response to a teacher warning students about behavioral expectations before imposing penalties. He plans to systematize record-keeping requirements across different financial entities to provide clearer guidance.
SEC’s Crypto Stance Shifts Under Atkins
Under the leadership of Atkins, the SEC’s stance has now aligned with Trump’s promise to make America the “crypto capital of the world.” While Gensler maintained that most tokens qualified as securities and pursued numerous enforcement actions, Atkins took the opposite direction, arguing that most tokens are not securities.
Atkins plans to develop rules enabling investors to trade tokenized versions of traditional securities that could operate continuously using blockchain technology. These synthetic securities would maintain identical legal rights while allowing 24/7 trading capabilities, potentially revolutionizing market accessibility.
The Chair referenced the FTX collapse as evidence supporting regulated US operations over offshore alternatives, noting that customers of the exchange’s regulated US derivatives arm recovered their funds while offshore investors faced losses.
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