Hotcoin Research | “Crypto Dad” Atkins’ First 60 Days: Inside the SEC’s Regulatory Shift and Crypto Policy Outlook

I. Introduction

On April 22, 2025, Paul S. Atkins was sworn in as the 34th Chairman of the U.S. Securities and Exchange Commission (SEC), sending a signal of unprecedented regulatory friendliness toward the crypto industry. In his inaugural speech, he explicitly stated that his “top priority” during his tenure would be to establish a clear and reasonable regulatory framework for digital assets, helping the U.S. become the world’s most innovative and attractive hub for crypto asset development.

Unlike his predecessor, Gary Gensler’s “heavy-handed enforcement” approach, Atkins is regarded as a “crypto dad,” advocating for “common-sense regulation” and “support for innovation.” To date, Atkins has publicly expressed clear policy stances on various areas, including crypto assets, DeFi, stablecoins, PoW, and PoS tokens. The SEC has also issued clarifying statements to define the scope of securities laws, aiming to boost industry confidence through greater regulatory transparency. At the same time, a series of high-profile enforcement cases have been withdrawn or settled, signaling a softer regulatory tone and a transition of the SEC from “enforcement-driven” to “rules-first” governance.

Since Atkins took office, major investment institutions have raised their allocation expectations for the U.S.-compliant market, while DeFi protocols and token markets have regained growth momentum. This report will review Atkins’ key policy signals to date, analyze its regulatory philosophy and policy direction in depth, and forecast the potential systemic impact on the industry.

II. Comparative Analysis of SEC Policies Under Two Chairmen

In stark contrast to the previous era of heavy-handed enforcement, Atkins is repositioning the SEC from an enforcer to a guide and rule-setter.

• Differences in Regulatory Philosophy:
  During Gary Gensler’s tenure, the SEC adopted an aggressive enforcement-first, innovation-second stance toward crypto assets. Under Gensler, the SEC expanded its crypto enforcement division and aggressively pursued lawsuits against exchanges and token issuers, which the industry viewed as “suppression through regulation.” In contrast, Atkins promotes a “new paradigm,” with the SEC’s special crypto task force focused on formulating clear policies and ending years of industry “paralysis and uncertainty.” Whereas Gensler issued a few tailored rules for crypto, Atkins has issued multiple statements clarifying legal boundaries within just two months and is pushing for new rulemaking. In summary, the former prioritized case-by-case deterrence, while the latter favors proactive rule-based guidance.
• Differences in Enforcement Approach:
  Gensler emphasized regulatory deterrence, often enforcing actions even when no fraud was involved, to assert the SEC’s authority. In contrast, Atkins favors prudence and restraint, showing tolerance for non-fraudulent technological exploration and preferring to resolve issues through dialogue. This shift is evident in organizational changes: before Atkins’ official appointment, Acting Chair Uyeda had already begun reducing crypto enforcement activities, renaming the enforcement group to the “Cybersecurity and Emerging Technologies” division, and reallocating personnel to rulemaking. Republican commissioners Uyeda and “Crypto Mom” Hester Peirce also publicly criticized Gensler’s litigation-heavy approach, advocating for new rules over endless legal battles.
• Specific Policy Differences:
  In terms of securities classification, Gensler adhered to the Howey Test, arguing that most tokens besides Bitcoin qualified as “investment contracts,” and even implied that many tokens were unregistered securities. Atkins’ camp holds the opposite view: in May 2025, Commissioner Peirce publicly stated that “most crypto assets in the current market are not securities.” Atkins himself has supported statements that effectively exclude PoW tokens, standard stablecoins, and truly decentralized tokens from securities regulation.
• Differences in Enforcement Cases:
  Under Gensler, the SEC sued crypto projects such as Ripple, Coinbase, Binance, and Kraken in an attempt to establish legal precedents via the courts. In contrast, following Atkins’ appointment, the SEC swiftly withdrew or paused many of these non-fraud-based “non-compliance” lawsuits, including dropping the Coinbase case, settling the Ripple case, and pausing action against Binance — a dramatic policy reversal.

III. Atkins’ Regulatory Stance on the Crypto Industry

Atkins emphasizes that the crypto asset sector needs a “reasonable market regulatory framework” that offers clear guidelines for asset issuance, custody, and trading, rather than blanket enforcement crackdowns. He pointed out that securities are migrating from traditional off-chain databases to blockchain networks and that the SEC must adapt and reassess whether existing rules are fit for on-chain securities and other digital assets.

He stated that under his leadership, the SEC will “no longer rely on the much-criticized enforcement-first approach” but they will instead use its rulemaking, interpretive, and exemption powers to provide precise standards for market participants. Atkins’ statements signal a major regulatory shift for the SEC — from ambiguous, enforcement-heavy tactics to transparent rules and a compliance-driven roadmap.

1. Crypto Asset ETFs

In 2024, the SEC approved the first spot Bitcoin and Ethereum ETFs. In 2025, dozens more crypto ETF applications emerged. Data shows that at least 31 “altcoin” ETF applications were filed in the first half of 2025, including products for XRP, BNB, SOL, DOGE, and even Trump-themed token TRUMP, reflecting market optimism about the new regulatory climate. Analysts expect the SEC to approve around ten of these ETFs, potentially ushering in an “altcoin summer” for compliant products.

2. Decentralized Finance (DeFi)

Atkins has stated that “economic freedom, property rights, and innovation — core American values — are inherent to the DeFi movement”. At a June 9, 2025, roundtable on “DeFi and the American Spirit,” he emphasized that century-old regulations should not stifle blockchain innovation. He also noted that unlike recent failures in centralized platforms, many on-chain protocols continued to operate resiliently during crises. Atkins believes DeFi requires a distinct regulatory framework from traditional intermediaries and proposed exploring conditional “innovation exemptions” that would allow eligible registered or non-registered entities to launch on-chain products and services, providing a regulatory sandbox for DeFi innovation.

3. Exchanges and Token Trading

Regarding crypto exchanges and securities platforms, Atkins advocates breaking past unreasonable restrictions and allowing compliant institutions to offer more diverse trading products. He noted that some brokers want to develop “super apps” integrating securities and non-securities trading, and that current laws do not prohibit registered broker-dealers operating alternative trading systems (ATS) from offering non-securities trading, including securities/non-securities pairs. He has instructed SEC staff to modernize ATS regulations to better accommodate crypto trading and to evaluate whether further guidance is needed to support listing crypto assets on national securities exchanges. This opens the door for traditional exchanges to legally list certain digital assets, ending the previous prohibition on touching crypto. In the interim, the SEC should not force innovation offshore, and Atkins is considering conditional exemptions to allow new products/services to launch domestically despite current rule limitations.

4. Miners, Validators, and Staking Services

Atkins has also sent a positive signal regarding crypto infrastructure, stating that “voluntarily participating as a miner, validator, or staking service provider in PoW or PoS networks is not subject to federal securities regulation.” This was seen by the industry as a “safe harbor” for mining and staking, protecting Bitcoin miners, Ethereum validators, and staking service providers, and confirming that consensus participation and rewards do not constitute securities issuance — a sharp contrast to Gensler’s era.

Under Gensler, the SEC targeted staking projects like Lido and Rocket Pool, classifying their liquid staking tokens (stETH, rETH) as unregistered securities. In contrast, Atkins has made clear that the new SEC will no longer target non-fraudulent projects attempting to comply in good faith.

5. Self-Custody Wallets and Infrastructure

Atkins publicly supports giving market participants more flexibility to self-custody digital assets, especially where intermediaries would add unnecessary costs or limit on-chain staking. He believes investors should have the right to hold crypto in their wallets rather than being forced into third-party custody. He criticized the previous administration for stifling innovations like self-custody and led the repeal of Staff Accounting Bulletin №121 (SAB-121), which had required banks and public companies to account for custodial crypto assets on balance sheets — a major barrier to offering custody services.

Atkins supports clarifying definitions of “qualified custodians” under the Investment Advisers Act and Investment Company Act and offering reasonable exemptions for common crypto practices — for example, allowing investment advisers and funds to self-custody client assets under certain conditions. He also proposed replacing the outdated “special purpose broker-dealer” framework with a more suitable system.

IV. Crypto Assets Not Classified as Securities by the SEC

Source：https://www.sec.gov/newsroom/speeches-statements/staff-statement-meme-coins

Since Atkins took office as SEC Chairman, the SEC has issued multiple official statements, staff guidance, and interpretive documents clarifying the regulatory boundaries for digital assets, indicating that the following types of crypto assets are generally not considered securities:

Meme Coins:

On February 27, 2025, the SEC’s Division of Corporation Finance released staff guidance on meme coins. This was the first specific clarification following Trump’s executive order on digital assets and the formation of a crypto task force, addressing how federal securities laws apply to certain categories of cryptocurrencies. The statement concluded that most meme tokens are not securities and their issuance and trading are not subject to federal securities law. “Meme coins” were described as tokens inspired by internet memes, pop culture, or trends, promoted via social media and community-driven trading.

These tokens typically serve entertainment, social, or cultural purposes, lacking substantial functionality or utility, and their value is highly speculative and sentiment-driven. The SEC emphasized that typical meme coins do not generate passive income nor confer rights to corporate profits or assets, fundamentally distinguishing them from traditional securities. However, the SEC also cautioned that economic substance matters: if a token labeled as a meme coin provides investment returns or is managed to generate profits, it could still be deemed a security.

PoW Tokens:

On March 20, 2025, the SEC’s Division of Corporation Finance stated certain proof-of-work (PoW) mining activities, clarifying that tokens generated via PoW consensus mechanisms are not considered securities and related mining activities do not constitute securities offerings. This applies to public, permissionless blockchains where block rewards are earned through PoW, covering both solo mining and mining pool operations. The “covered crypto assets” are those inherently tied to network operations — used in consensus or as mining rewards. Miners and mining pool operators participating in such activities do not need to register with the SEC.

Stablecoins:

On April 4, 2025, the SEC’s Division of Corporation Finance released a statement on stablecoins, ruling that certain fiat-pegged stablecoins are not securities if they meet specific criteria: (i) designed to maintain a 1:1 peg with the U.S. dollar and redeemable at par; (ii) backed by sufficient low-risk, highly liquid reserves equal to or exceeding circulating supply; (iii) used for payments and value storage without promising interest, dividends, or investment returns. For such stablecoins, issuance and circulation do not involve securities offerings and do not require registration. It should be noted that algorithmic stablecoins, non-USD pegged stablecoins, or yield-bearing stablecoins are not covered by this exemption and may still be treated as securities.

PoS Staking Tokens:

On May 29, 2025, the SEC’s Division of Corporation Finance issued guidance stating that staking in proof-of-stake (PoS) networks does not constitute a securities offering or sale, and therefore does not require SEC registration. The statement defined “protocol staking” tokens as native assets of public, permissionless networks used for consensus and security, which do not provide holders with passive income rights. When token holders self-stake, delegate to third-party validators, or stake through custodial platforms, they retain ownership and control of their tokens, and rewards earned reflect their contributions to network security — not investment returns based on the efforts of others. Thus, staking activities involving such tokens do not meet the Howey Test criteria for investment contracts, and related transactions are not securities.

DeFi Tokens:

Currently, the SEC has not formally excluded “DeFi tokens” from securities classification. However, on June 9, 2025, during an SEC special roundtable on digital assets, Atkins announced plans to direct SEC staff to study conditional “innovation exemptions” for DeFi platforms, allowing decentralized finance projects that meet certain criteria to operate with lighter regulatory requirements. Atkins stressed that U.S. law should protect the public’s right to engage with blockchain innovations — such as self-custody of digital assets and direct participation in on-chain protocols. While not yet formalized, these statements indicate the SEC’s intent to adopt a more lenient stance toward truly decentralized DeFi tokens without embedded investment returns. Future SEC guidance or rulemaking may further clarify the legal status of such tokens.

V. Outlook for Potential Policy Measures

Based on Atkins’ public statements and the current U.S. regulatory landscape, the following key policy initiatives are likely during his tenure:

1. Revamping and Expanding Crypto ETF Reviews

Crypto ETFs faced many obstacles under Gensler, but the new SEC leadership is showing greater openness. Following the 2024 approvals of spot Bitcoin and Ethereum ETFs, a wave of altcoin ETF applications emerged under Atkins. The SEC is expected to accelerate reviews of such products and may develop dedicated guidelines for crypto ETFs. Beyond ETFs, other innovative products — such as DeFi yield funds and NFT-backed investment tools — may also receive renewed consideration.

2. Clarifying Crypto Securities Classification

The industry’s long-standing uncertainty over “which tokens are securities” may be resolved under Atkins. While the Howey Test remains foundational, the SEC may issue new guidance or rules specifically explaining its application to digital tokens — clarifying what level of decentralization exempts tokens from securities status, how token utility influences classification, and how secondary market transactions are treated.

Indeed, since 2025, the SEC has gradually clarified certain categories: “pure payment” stablecoins are not securities; “meme tokens” without identifiable issuers may be outside securities law; and PoW/PoS rewards are not securities transactions. These piecemeal clarifications should evolve into binding rules to eliminate regulatory gray areas. The SEC now favors codifying such classifications in clear, enforceable regulations rather than relying on case settlements.

3. Legislative Clarification of Regulatory Jurisdiction

While the SEC oversees securities, crypto assets span commodities, currencies, and other domains — creating jurisdictional disputes with the CFTC and banking regulators. Congress is now advancing the 2025 CLARITY Act and GENIUS Act to define regulatory boundaries and establish legal frameworks for stablecoins. If passed, the U.S. would gain a unified regulatory framework for digital assets, resolving overlapping and ambiguous oversight.

4. Other Potential Reforms

In addition to the above, Atkins’ SEC may introduce internal and cross-agency measures — potentially restructuring its crypto divisions, elevating the special crypto task force to an official policy office, and enhancing cooperation with other agencies. While Atkins will likely continue prosecuting serious fraud or investor harm cases, possibly in coordination with the DOJ, he is also expected to issue regular policy statements to dispel market misperceptions that he is “too lenient.” Such communication would help manage expectations and guide lawful innovation in the industry.

VI. Impact and Outlook: A New Trajectory for the Crypto Market

Atkins’ policy shift has already buoyed market sentiment. The rally in DeFi tokens and Coinbase stock’s 3.5% jump following lawsuit withdrawal underscore how improved regulatory clarity is being priced in. Some analysts described the Coinbase case dismissal as “lifting a multi-year cloud from investors,” and domestic trading activity is rebounding — indicating that a favorable regulatory environment is reviving industry vitality. Previously stalled initiatives are resuming, and innovators are regaining confidence in the U.S. market.

If the SEC approves a series of crypto ETFs in the next six months, it could trigger an “ETF effect,” driving new capital inflows. More broadly, clear regulation helps dispel years of uncertainty, attracting traditional institutional investors to digital assets. Wall Street giants like JPMorgan are already preparing crypto trading platforms, betting on an improved policy outlook. Meanwhile, a more permissive environment could revitalize and upgrade DeFi. Developers may launch bolder DeFi products, fostering more diverse use cases and driving Web3 ecosystem growth.

Nevertheless, challenges remain:

• Policy implementation pace and strength are uncertain: Many of Atkins’ initiatives require formal rulemaking or Congressional action, which may face delays or opposition — for example, whether the Democrat-controlled Senate will support crypto bills, or whether Democratic SEC commissioners will back reform proposals.
• External shocks could still reverse trends: Another major market scandal or crash (akin to the 2022 Luna or FTX events) could force the SEC to tighten its stance again due to public and political pressure.
• State-level and other regulatory actions may complicate the picture: State attorneys general, such as in New York, have signaled they will fill any perceived federal enforcement “vacuum.” Even if the SEC softens enforcement, state regulators and law enforcement may maintain pressure.

Conclusion

Paul S. Atkins’ appointment marks the dawn of a new, crypto-friendly era in U.S. securities regulation. In just two months, through speeches, statements, and actions, he has sketched a roadmap for supporting innovation, prioritizing rules-based guidance, combating fraud, and fostering collaboration. The coming debate over Atkins’ policies will continue, but this paradigm shift is already prompting a reevaluation of how crypto technology should intersect with financial regulation. With constructive participation from all sides, a balanced regulatory framework that protects investors while enabling innovation could emerge, offering a global example.

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