rewrite this title SEC Chair Slams Agency’s Previous ‘Head-In-The-Sand’ Crypto Regulation | Bitcoinist.com

In a significant address aimed at revitalizing the relationship between regulators and the cryptocurrency market, new US Securities and Exchange Commission (SEC) Chair Paul Atkins outlined his vision for a more constructive regulatory environment. 

Trust Deficit Between SEC And Crypto Industry

Speaking to capital markets on Monday, Atkins criticized the previous administration’s “regulation by enforcement” approach, which he believes has stifled innovation and left the crypto industry in a state of uncertainty.

Atkins described the SEC’s past strategies as a “head-in-the-sand” approach, initially hoping that the crypto market would simply fade away. This was followed by a more aggressive “shoot-first-and-ask-questions-later” method, where market participants often found themselves facing subpoenas rather than receiving guidance. 

The new pro-crypto chair emphasized that this created a “Catch-22” — a difficult situation from which there is no escape — for those trying to navigate the regulatory landscape. He believes that this has led to a lack of trust between the SEC and the crypto industry.

In his prepared remarks, Atkins stated, “The crypto markets have been languishing in SEC limbo for years.” He underscored the need for regulators to adapt existing rules to accommodate technological advancements, arguing that the SEC should use its authority to foster innovation rather than impede it. 

“Old ways of doing things should not be immutable,” he also noted while advocating for flexibility in regulatory frameworks to better align with the evolving nature of the digital asset market.

Plans To Draft New Digital Asset Rules

Atkins also highlighted the previous SEC leadership’s failure to facilitate open communication between staff and market participants, particularly when complex legal questions arose. 

To address this, Atkins has directed the Division of Corporation Finance to maintain transparent interactions with the public, allowing for more nimble capital allocation and fostering a more collaborative environment.

As part of his commitment to reform, Atkins announced that the SEC staff is currently drafting rule proposals related to cryptocurrency. Meanwhile, he encouraged staff to provide useful insights through informal FAQs, which, although not formal regulations, can help clarify industry concerns.

One of Atkins’ proposals includes allowing SEC registrants to custody and trade both securities and non-securities under one roof, a move he believes could streamline operations and reduce costs for investors. He envisions this as a step toward creating a “super-app” that could integrate various financial services, making them more accessible.

Atkins concluded his address with a promise to prioritize innovation, stating, “We are getting back to our roots of promoting, rather than stifling, innovation.” He expressed optimism about the SEC’s future direction and its potential to enhance the market for investors.

Featured image from DALL-E, chart from TradingView.com 

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