On May 12, 2025, the U.S. Securities and Exchange Commission (SEC) hosted its fourth Crypto Roundtable, focusing on a timely and transformative theme: "Tokenization: On-Chain Assets — The Intersection of Traditional Finance and Decentralized Finance." This event marked a pivotal moment in U.S. crypto policy, as newly appointed SEC Chair Paul Atkins delivered his first comprehensive address on digital assets since officially assuming office on April 22.
His speech signaled a notable shift in tone, strategy, and regulatory philosophy — one that could redefine how the United States positions itself in the global crypto economy.
A Paradigm Shift in SEC’s Regulatory Approach
Chair Atkins began by drawing a powerful analogy between the evolution of digital audio and the current transformation of financial assets. Just as music transitioned from vinyl to cassettes to digital formats — unlocking new forms of distribution, interactivity, and business models — securities are now migrating from traditional databases to blockchain-based ledgers.
This shift isn’t merely technological; it’s foundational.
“Securities are increasingly moving from off-chain systems to on-chain blockchain ledgers,” Atkins stated. “This transition has the potential to revolutionize how we issue, trade, hold, and use financial instruments.”
The implications are vast: automated dividend distributions via smart contracts, fractional ownership of illiquid assets like real estate or art, and seamless interoperability across financial platforms. These innovations demand a regulatory framework that enables — rather than stifles — progress.
Atkins emphasized that under his leadership, the SEC will move away from what he described as an era of "enforcement-first" regulation — where uncertainty was managed through litigation rather than clear rules.
Instead, the commission will leverage its existing authority to create precise, forward-looking standards through rulemaking, interpretation, and exemptions. The goal? To provide market participants with clarity while maintaining strong investor protections.
Three Pillars of the New Regulatory Framework
To realize President Trump’s vision of making America the global hub for crypto innovation, Chair Atkins outlined three core focus areas: issuance, custody, and trading. Each represents a critical lever in shaping a modern, adaptive regulatory environment.
1. Issuance: Building Clear Pathways for On-Chain Securities
One of the most significant barriers to compliant crypto issuance has been regulatory ambiguity. Currently, only four crypto issuers have successfully registered offerings under traditional frameworks like Regulation A or full registration.
Why so few?
Because applying legacy disclosure requirements — such as detailed executive compensation or capital use plans — to decentralized protocols often makes little sense. As Atkins noted, forcing blockchain projects into outdated templates is like “cutting off toes to fit into old shoes.”
He criticized past approaches as alternating between “ostrich policy” — ignoring crypto altogether — and “shoot first, ask questions later” enforcement tactics. While the SEC claimed openness to engagement (“come in and talk to us”), it failed to modernize its forms or provide actionable guidance.
Now, change is underway.
The SEC staff recently issued a statement clarifying that certain token offerings do not fall under federal securities laws. Chair Atkins endorsed this step but stressed it’s not enough. He has directed the agency to evaluate:
- New registration frameworks tailored to crypto assets
- Expanded exempt offerings and safe harbors
- Technology-specific adaptations to disclosure rules
His message is clear: The SEC must proactively enable compliant innovation, not wait to punish noncompliance.
👉 Learn how new regulatory clarity could unlock institutional-grade crypto issuance in the U.S.
2. Custody: Modernizing Rules for Digital Asset Protection
Custody has long been a bottleneck for crypto adoption in traditional finance. The controversial Staff Accounting Bulletin 121 (SAB-121) previously imposed stringent capital charges on banks and brokers offering crypto custody, effectively discouraging participation.
That obstacle has now been removed.
Under Atkins’ leadership, the SEC reversed SAB-121 — a move he called long overdue and procedurally flawed when originally implemented. But removal alone isn’t sufficient.
The next step? Redefining who qualifies as a “qualified custodian” under the Investment Advisers Act and Investment Company Act, with specific recognition of advanced self-custody solutions used by many funds and advisors.
“Many investment firms use self-custody systems more secure than commercial providers,” Atkins observed. “Our rules should reflect technological reality.”
He also signaled potential reforms to the special purpose broker-dealer framework, which has failed to gain traction due to restrictive conditions. With only two such entities operating today, the model clearly needs rethinking.
Future rules may allow broader participation in crypto custody activities by registered broker-dealers, provided robust customer protection and net capital standards are met.
3. Trading: Unlocking Innovation in Market Structure
Finally, Chair Atkins addressed the need to modernize trading infrastructure. He supports allowing registered platforms to offer a wider range of products — including integrated services that blend securities, non-securities, and other financial tools.
Think “super apps” — platforms that combine brokerage, payments, lending, and crypto trading in one interface.
“There is no statutory bar preventing registered alternative trading systems (ATSs) from offering non-security trading services,” he noted.
Atkins has tasked SEC staff with exploring how ATS regulations can be updated for on-chain assets. This includes assessing pathways for listing crypto assets on national securities exchanges, ensuring they meet transparency, fairness, and investor protection standards.
Additionally, he expressed openness to conditional exemptions for both registered and unregistered entities experimenting with novel products — even if they don’t fully comply with current rules. Such sandboxes could foster responsible innovation without sacrificing oversight.
Frequently Asked Questions (FAQ)
Q: What did Paul Atkins say about the SEC’s past enforcement approach?
A: He criticized it as reactive and inconsistent, describing previous strategies as either ignoring crypto (“ostrich policy”) or relying too heavily on enforcement without clear rules (“shoot first, ask questions later”).
Q: Will the SEC create new rules specifically for crypto?
A: While no entirely new law is needed, Atkins affirmed the SEC will use its existing authority to issue targeted guidance, exemptions, and rule updates tailored to blockchain-based securities and market practices.
Q: What impact does repealing SAB-121 have?
A: It removes a major disincentive for banks and financial institutions to offer crypto custody services, potentially increasing institutional participation in digital asset markets.
Q: Are self-custody solutions likely to be recognized under new rules?
A: Yes — Chair Atkins acknowledged that many funds already use sophisticated self-custody methods and suggested regulations should accommodate these secure, technology-driven practices.
Q: Could we see crypto assets listed on traditional stock exchanges soon?
A: The SEC is actively studying this possibility. Atkins emphasized the importance of modernizing ATS rules and evaluating listing standards for national exchanges.
Q: Is the U.S. moving toward a crypto regulatory sandbox?
A: While not formally announced, Atkins expressed support for conditional exemptions that would allow innovators to test new products under supervision — a key feature of regulatory sandboxes.
Toward a Competitive, Innovation-Friendly Future
Chair Paul Atkins’ inaugural crypto address marks more than a change in leadership — it signals a potential turning point in U.S. financial regulation.
By prioritizing clarity over confusion, rulemaking over enforcement, and adaptation over stagnation, the SEC under his guidance aims to position America at the forefront of tokenized finance.
The ultimate goal? To ensure American investors benefit from blockchain innovation while maintaining world-class investor protections — all without forcing entrepreneurs to build elsewhere.
👉 See how global markets are responding to the U.S.'s evolving crypto regulatory landscape.
As these proposals take shape, stakeholders across finance, technology, and policy will be watching closely. One thing is certain: the era of regulatory uncertainty may finally be giving way to one of structured opportunity.