A shift from Gensler’s enforcement-first approach
The U.S. Securities and Exchange Commission (SEC) is signaling a major shift in how it regulates the cryptocurrency industry. In an interview with the Financial Times on Monday, SEC Chair Paul Atkins confirmed that crypto businesses will now receive advance notice of technical violations before any enforcement actions are taken.
“You can’t just suddenly come and bash down their door and say, ‘Uh-uh, we caught you,’” Atkins said. “Businesses can now expect to first receive a preliminary notice.”
This marks a clear departure from the enforcement-heavy agenda under former SEC Chair Gary Gensler, who frequently relied on litigation to regulate the industry.
Moving away from regulation by enforcement
Atkins’ comments highlight his commitment to building a more predictable and collaborative regulatory environment for crypto companies. He criticized the prior approach, saying many enforcement decisions “were not grounded in precedent” and that the SEC would “shoot first and ask questions later.”
The new SEC chair suggested that crypto businesses may now have up to six months to respond before enforcement actions are finalized — a significant shift designed to improve regulatory clarity.
Gensler’s era brought lawsuits against major players
Under Gensler’s leadership, the SEC filed lawsuits against some of the largest names in crypto, including Ripple Labs in 2020, Terraform Labs in 2022, and major exchanges like Binance, Coinbase, and Kraken in 2023. These cases cost the industry billions of dollars in legal fees and drew criticism for stifling innovation.
Supporting tokenization and industry growth
Atkins also distanced himself from Gensler’s claim that most cryptocurrencies are securities. He said most tokens do not fall under securities laws and expressed support for trading tokenized stocks and bonds with the same legal rights as their underlying assets.
Since Atkins’ confirmation by the Senate on April 9, the SEC has formed a new Crypto Task Force to work with industry stakeholders and has dropped several investigations launched under Gensler.
A friendlier future for U.S. crypto businesses?
Atkins’ approach could bring much-needed regulatory clarity and reduce uncertainty for crypto companies operating in the U.S. The shift toward early notices and industry consultation may encourage innovation while still protecting investors — a balance many in the crypto community have long called for.
