From Enforcement to Empowerment: SEC Chairman Paul Atkins Charts a New Regulatory Approach for Digital Assets

Securities and Exchange Commission (SEC) Chairman Paul S. Atkins promoted a forward-looking regulatory agenda centered on innovation, market competitiveness, and long-term predictability at the Futures and Derivatives Law Report Digital Asset Leadership Summit, and also stressed the importance of sustained engagement with fellow regulators, the public, and industry stakeholders.[1] Drawing from his prior public remarks and subsequent discussion, Chairman Atkins emphasized three interlocking priorities to: (1) establish a formal “innovation exemption” to foster responsible technological development in US markets, (2) advance structural reforms to “future-proof” the SEC’s regulatory agenda, and (3) redefine the SEC’s role as a “Securities and Innovation Commission.”

A Framework for Innovation Through Exemption

Chairman Atkins announced that the SEC is preparing to initiate rulemaking by year-end to formalize an “innovation exemption,” designed to encourage digital asset and fintech developers to build within the United States rather than offshore. He said, “[W]e’ve had four years, at least, of repression of that [the digital asset industry], and with the result of pushing things abroad, rather than having innovation being done [here],” and observed that “anecdotally, I am hearing from friends that folks who had fled the jurisdiction here are coming back.”

The innovation exemption would create a path for limited-scope experimentation under clear parameters and offer firms an environment to test new technologies. Chairman Atkins described the initiative as a “top priority” despite operational constraints from the ongoing federal government shutdown, stating that he is confident the SEC can move to rulemaking by the end of 2025 or early 2026. By formalizing this process through notice-and-comment rulemaking, the SEC would move beyond prior years' “regulation-by-enforcement” approach and provide developers with defined, predictable compliance expectations.

“Future-Proofing” the Regulatory Agenda

Beyond digital assets, Chairman Atkins clarified his broader goal of embedding reform that can withstand future political shifts. He cited recent Supreme Court rulings curbing administrative agency authority. To ensure continuity, Chairman Atkins emphasized the need for rulemakings supported by robust administrative records and judicial clarity, calling it essential to avoid the flip-flopping of policy across administrations.

Re-Energizing US Capital Formation and Interagency Collaboration

Chairman Atkins also used the Summit to discuss capital markets competitiveness, noting that the number of public companies has declined by half since 1999. He identified three impediments: (1) litigation exposure; (2) compliance cost; and (3) corporate governance rigidity, and encouraged revisiting disclosure and listing requirements to “make capital markets great again.”

On interagency coordination, Chairman Atkins advanced the concept of a “Super App” framework to promote cooperation between the SEC and the CFTC on products that straddle both jurisdictions. “What I hope we avoid,” he remarked, “is dividing the world between Spain and Portugal”, a reference to the 15th-century papal division of territories, highlighting his call for collaboration over agency turf wars in regulating novel financial instruments.

A Durable Message for Market Participants

For market participants, the implications of Chairman Atkins’s remarks are twofold. First, the SEC intends to create regulatory certainty for innovators, pairing flexibility with clear guardrails to keep development domestic.[2] Second, the SEC’s regulatory efforts are meant to be long-lasting, strengthened by interagency coordination. Chairman Atkins’s comments signal a decisive pivot from enforcement-first policymaking toward a structured, innovation-friendly SEC; one that seeks to update rules, streamline oversight and ensure that US markets remain the preferred home for the next generation of financial technology.

[1]See Katten’s Quick Reads coverage of Commodity Futures Trading Commission (CFTC) Acting Chairman Caroline Pham’s remarks at the Futures and Derivatives Law Report Digital Asset Leadership Summit here.

[2]See Katten’s Quick Reads coverage of recent SEC initiatives here.