SEC Chair Paul Atkins Backs Trump Administration’s Post-Shutdown Crypto Deregulation Push

As the U.S government has reopened following the end of a 41-day shutdown, the largest in history, the Securities and Exchange Commission (SEC) is focused on rewriting its rules to regulate the cryptocurrency industry, aligning with President Donald Trump’s crypto-friendly policy direction.

According to an analyst at investment banking giant TD Cowen, the securities watchdog has entered what it calls the “most important 12-month period” under Chair Paul Atkins.

SEC Chair Paul Atkins has 12 Months to Work on President Trump’s Crypto-Friendly Agenda, Says JD Cowen Analyst

TD Cowen’s Washington Research Group lead Jaret Seiberg wrote in a Monday investor note that the SEC is preparing to implement Atkins’s “deregulation agenda,” particularly regarding crypto assets.

Since Trump’s inauguration in January, the agency has made several moves to clarify its crypto stance, including releasing a policy guidance on staking, which will no longer be considered a securities activity under federal law, holding roundtables with industry leaders, and launching a joint campaign with the Commodity Futures Trading Commission (CFTC) – “Project Crypto” – to modernize its rules.

The shutdown had severely impacted the SEC’s operations, with its operational strength dropping from 4,200 persons to minimal essential personnel during the 41 days. Atkins used this period to implement emergency measures, such as expediting a process that saw companies like Maplight and Navon going public just 20 days after registration under the federal Securities Act.

Seiberg noted that the agency “needs to start” issuing regulatory proposals in the coming months so it can finalize them in 2027. It can take up to two years for the SEC to propose and finish its rules. This timeline will provide it with enough time to defend its policies in court, ensuring they are implemented before the end of 2028.

He also suggested that Atkins is focused on a range of issues outside of crypto, such as the semi-annual reporting by companies, and allowing retail investors to have access to alternative forms of investments.

When it comes to crypto, the SEC Chair is focused on tokenized securities, which are stocks converted into blockchain-issued tokens. These digital tokens have garnered popularity among both crypto and non-crypto investors looking to gain seamless exposure to the stock market. If crypto exchanges are allowed to trade tokenized securities in the United States, then they will be in direct competition with traditional brokerages.

Paul Atkins’s SEC Ends Biden and Gensler-Era Regulation-by-Enforcement Crypto Policy

With Atkins, the SEC has taken a dramatically different approach from how it was under his predecessor, Gary Gensler, who served as the Chair during President Joe Biden’s term in the White House.

The Trump-appointed official has rejected Gensler’s regulation-by-enforcement agenda, which treated most crypto assets as securities offerings that required service providers to adopt strict compliance. He also declared that cryptocurrencies are considered non-securities when issued on a decentralized network (blockchain).

During Gensler’s tenure, the agency launched over 100 enforcement actions against major crypto players, including Binance, Coinbase, Ripple, and Kraken. Critics argued that this created uncertainty among investors and stifled innovation in the sector, forcing many companies to limit or wind up U.S. operations and move offshore.

The Trump administration has already dropped enforcement actions against these companies. Before Atkins’s confirmation, Acting Chair Mark Uyeda and Commissioner Hester Peirce launched the Crypto Task Force, which is focused on clarifying the rules for the crypto market.

SEC’s ‘Project Crypto’ to Create Token Taxonomy to Differentiate Between Crypto Securities and Non-Securities

In July 2025, Atkins unveiled “Project Crypto”, a commission-wide initiative designed to modernize securities rules for blockchain-based assets. The project has promised to create purpose-built regulations on how cryptocurrencies can be distributed, traded, and stored. The agency is actively seeking public feedback.

Project Crypto also includes plans to create a “token taxonomy” that aims to differentiate between what cryptocurrencies would be classified as securities and non-securities by the SEC. Speaking at the Federal Reserve Bank of Philadelphia’s Fintech Conference last week, Atkins said that crypto taxonomy will be rooted in the Howey Test – a 1946 Supreme Court ruling cited by the regulator to determine if an asset qualifies as an investment contract, making it a security.

The SEC chair stated that under the new ruling, cryptocurrencies can be part of an investment contract, but that doesn’t mean they will stay that way forever. He noted that blockchains can “mature” and their control can “disperse”, diminishing the issuer’s role in the network. This means that at some point, purchasers would no longer depend on the issuer’s “essential managerial efforts,” as most tokens already trade without any “reasonable expectation” that a particular team is at the helm.

Atkins reiterated that the agency’s stance on tokenized securities would remain the same, as they will be regulated as securities assets. He also spoke about crypto “super apps” that would allow for the trading and custody of several assets under a single license. He has asked his staff to work on that.

Atkins has also asked his staff to prepare recommendations for the Commission to consider allowing tokenized securities to trade on non-SEC-regulated platforms, which are either registered with the CFTC or operating under a state regulatory regime.

SEC’s Crypto Rules will “Complement” the Upcoming U.S. Crypto Market Structure Bill

Meanwhile, U.S. lawmakers are working on a crypto market structure bill, with multiple versions of the legislation under consideration. The House passed its version in July, and the Senate now has two versions, one by the Senate Agriculture Committee and the other by the Senate Banking Committee.

The SEC, which falls under the oversight of the Senate Banking Committee, is moving ahead with its regulatory proposals, which Atkins has said will complement, and “not replace”, Congress’s efforts.

Also Read: SEC Drops Crypto From 2026 Examination Priorities, Signals Market Growth