The Securities and Exchange Commission will continue expanding its regulatory framework for cryptocurrency and digital assets. On October 2, SEC Chair Paul Atkins announced the agency's commitment to modernizing crypto regulation through multiple initiatives.
Atkins highlighted a proposal to update custody rules for crypto assets, noting that existing regulations date to 1940 and were designed for traditional assets rather than digital ones. He characterized this effort as part of a broader regulatory approach that began in 2025 when the SEC shifted away from regulation by enforcement under former Chair Gary Gensler.
Multiple Regulatory Initiatives Underway
The SEC has introduced two landmark regulatory programs alongside the custody framework:
- Regulation Crypto Assets creates a tailored offering regime for crypto assets classified as investment contracts
- Innovation Exemption establishes a 5-year sandbox allowing national stocks to trade on decentralized exchanges and through liquidity providers
Keeping Markets Onshore
Atkins stated that these efforts recognize blockchain technology's potential to modernize the financial system. "Onchain markets should not be relegated offshore or forced into ill-fitting regulatory models," he declared, emphasizing the regulatory approach aims to maintain cryptocurrency activity within U.S. jurisdiction.
Atkins signaled additional regulatory proposals are forthcoming, stating the agency's work in the crypto field remains incomplete.
Regulatory Concerns Raised
The SEC's approach has drawn criticism. John Reed Stark, former Chief of the SEC Office of Internet Enforcement, has argued the regulatory expansion exceeds the agency's authority and usurps Congress's regulatory role.
