SEC Pledges Further Crypto Rule Changes to Keep Markets Onshore

The SEC is set to introduce more regulatory changes for the cryptocurrency market, according to SEC Chair Paul Atkins. In a recent statement, Atkins highlighted the need for modernized rules for crypto asset custody, which would update the existing 1940 custody regulations that only accounted for traditional assets. The new rules aim to better fit the digital landscape of today's markets.

Atkins emphasized that these changes are part of a comprehensive approach to regulating cryptocurrencies, which the commission has been working on since 2025. This includes initiatives such as Regulation Crypto Assets, which creates a tailored offering regime for crypto assets as investment contracts, and the Innovation Exemption, which establishes a 5-year sandbox for decentralized exchanges and liquidity providers.

Atkins believes that blockchain technology has the potential to modernize the financial system, and that on-chain markets should not be forced offshore or subject to ill-fitting regulatory models. However, not everyone agrees with this approach. Former SEC Office of Internet Enforcement Chief John Reed Stark has argued that this regulatory push exceeds the agency's authority and usurps Congress's authority.