What Reforms Can We Expect from Paul Atkins at SEC?

Donald Trump recently chose Paul Atkins as the next Chairman of the U.S. Securities and Exchange Commission (SEC), fulfilling his promise before the election to dismiss incumbent Gary Gensler on his first day in office. But Trump will not fire Gensler. The 67-year-old man, who has spoken out against cryptocurrencies since taking office as Chairman of the SEC in 2021, said he will resign on January 20, when Joe Biden leaves office. Atkins, a lawyer and former businessman with previous experience at the SEC, had to make a lot of effort. He is now stepping into the role of a man who has become one of the biggest enemies of the cryptocurrency industry. Many expect him to 'clean up the mess' because Gensler, who is accused of trying to bring down the industry through 'enforcement regulations'. Hester Peirce, a current SEC commissioner, also known as "Crypto Mom" for her support of cryptocurrencies, said Atkins is the most suitable person for the job. "We still have a lot of work to do at the SEC to promote free markets, capital formation, investor choice, and innovation," she wrote on X. "I am delighted that Paul Atkins will return to lead this effort." Please provide the text to be translated. How did Gensler become the 'Number one enemy of Crypto' To better understand, Gensler is the product of the uncertainty of US law on cryptocurrencies. With vague laws, the SEC has the authority to determine which tokens are investment contracts. And it has pursued tokens and NFTs with real-world use cases beyond speculation. Under Gensler, the regulator has taken a record number of enforcement actions against crypto companies. In 2023, the Commission has taken 53% more action on the industry than in the previous year. Furthermore, according to cryptocurrency investment firm Paradigm, during his three-year tenure, Gensler has been responsible for 50% of the enforcement actions that the SEC has taken in the cryptocurrency field since 2015. The 238 million dollars that the cryptocurrency lobby spent on supporting industry-friendly candidates in the November election still pales in comparison to the 429 million dollars lost by the 100-member Blockchain Association in its struggle with the SEC. The lesson drawn here is that managing cryptocurrency in accordance with current laws is also a philosophical as well as a legal issue. By nominating Atkins, who is considered a Bitcoin supporter, Trump is clearly rewarding the support of the cryptocurrency community. The President-elect is confident that he has chosen the right person for the job. "Paul is a proven leader in reasonable regulations," Trump said when announcing the nomination earlier this December. "He believes in the promise of a strong, innovative capital market that meets the needs of investors..."

'Sure choice' Atkins is an SEC commissioner under George Bush and has a progressive record that Trump can use in the management agency. Since resigning at the end of Bush's term, Atkins has vehemently opposed Dodd-Frank, a package of rules implemented after the 2008 financial crisis aimed at creating profound changes to the US financial management system. Atkin's tenure at the SEC also marks him as an ideal candidate in the Trump era, according to previous reports. The former commissioner opposed large fines for companies violating securities laws. Recently, he has been involved in supporting cryptocurrencies through the Token Alliance advocacy group. Mason Jappa, CEO of the US-based Bitcoin mining company Blockware, described Trump's nomination of Atkins as a "sure choice". Jappa told Cryptonews, "What cryptocurrencies need from regulatory agencies to thrive in the US is transparency and consistency - Atkins is famous for both," while adding: “At the very least, cryptocurrencies will work well in a neutral and Atkins-managed environment, as a libertarian, he can bring that into play even if he does not become a staunch supporter of cryptocurrencies.” [Atkins] Jappa said he hopes Atkins will create "a clear set of rules for large capital allocators to start taking the industry more seriously." He noted that the SEC's approval of Bitcoin and Ethereum exchange-traded funds (ETFs) for spot trading is "a major step in that direction". The clarity of regulations Some critics seem to be concerned about the repeal of regulations under the Atkins era. However, George Georgiades, general counsel at the stablecoin payment network Borderless.xyz, said that the cryptocurrency industry often calls for clarity of regulations, rather than the repeal of regulations. He said they want an orderly rule-making process. Speaking to Cryptonews, Georgiades said that Atkins is joining the SEC at a 'important time [for] our industry.' He hopes the 66-year-old man will make changes to help the United States become a leader in cryptocurrency adoption. When asked about the changes Atkins can make to facilitate the cryptocurrency industry, Georgiades said: "It starts with a return to our traditional rulemaking process and meaningful engagement between the SEC and market participants. [This] is intended to ensure there is regulatory clarity on how digital assets are described, determine the scope of the SEC's jurisdiction relative to other U.S. regulators, and balance consumer protection with the need to embrace innovation." Georgiades, a technology-savvy compliance lawyer, said there were "complex legal issues" related to the characteristics of some cryptocurrencies that need to be reformed. These include the design of staking products, stablecoin structures, and encrypted Real World Assets (RWA). He said such issues need clarification "on whether oversight is within the jurisdiction of the SEC. If so, how to include these products in our application or exemption process." Georgiades said: The mission of the SEC is to protect investors; maintain a fair, orderly, and efficient market; and facilitate capital formation. Regulation through enforcement and ambiguity will not achieve those goals. Courage Kimber, a cryptocurrency analyst and American digital nomad, believes Atkins is Donald Trump's "least controversial choice" due to his previous experience as an SEC commissioner. Kimber shared with Cryptonews via LinkedIn that, "Considering his work as a lobbyist for cryptocurrency companies and his connection to the Chamber of Digital Commerce, it is very likely that he will establish a clear regulatory framework for the industry to comply with." Can Paul Atkins repeal the regulation? For Slava Demchuk, CEO of compliance and blockchain AMLBot, Atkins 'may support the removal of regulations, potentially reducing compliance burden for cryptocurrency companies'. Demchuk emphasized that many regulatory agencies and organizations are currently overseeing the cryptocurrency industry, including the SEC, CFTC, FinCEN, and IRS. He said, "Without a unified management framework or a clear understanding of the jurisdiction of each agency, companies will find it difficult to meet compliance requirements and operate efficiently." Demchuk told Cryptonews that he expects Atkins to "expand support for electronic money services in national banks, simplifying integration with traditional financial infrastructure." He added: “The government may support the use of sandbox management, allowing banks to safely experiment with blockchain and digital asset initiatives without being burdened by heavy regulatory constraints. He may support minimal government intervention…” Sid Powell, CEO and co-founder of the digital lending platform Maple, said that Trump's choice of Atkins "shows that the new administration is not only looking for cryptocurrency supporters but also those who have taken the time to develop relationships in the industry". "U.S. innovators and cryptocurrency/blockchain startups will be happier under the Atkins regime," Powell told Cryptonews. "There will be greater incentives for innovators, regulatory authorities, and key players in the cryptocurrency space to collaborate rather than face regulatory disadvantages." But all the proposed reforms depend on whether Atkins will accept the job or not. The former commissioner does not want to leave his consulting firm, Patomak Global Partners, because of the amount of work needed to turn around the SEC, Coindesk reported, citing sources familiar with the matter. Atkins believes that Gensler has "mismanaged" the agency, sources said. 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