In a conversation with the Financial Times on September 15, SEC Chair Paul Atkins shared plans to move away from the past strategy of launching enforcement actions without warning.

Atkins explained that companies working with digital assets will be given an initial heads-up if the agency identifies technical rule breaches.

Instead of surprising firms with legal action, Atkins said the commission will issue a preliminary notice before taking any steps. He told the FT:

You can’t just suddenly come and bash down their door and say uh-uh, we caught you, you’re doing something and it’s a technical violation.

He also criticized past SEC actions that lacked consistency and clear legal backing. Atkins noted that many felt the agency’s earlier decisions were unpredictable and not based on past rulings.

Describing the former approach as one where the SEC “would shoot first and then ask questions later”, he said that a more thoughtful process is being introduced. Under the new method, firms may have several months to address concerns before any official action is taken.

Additionally, Atkins pushed back against the idea that most crypto tokens should be considered securities. He stated that many do not fall under the same rules as traditional financial instruments.

Recently, Atkins introduced a proposal that would allow companies offering crypto services to operate under a single regulatory system. What does it include? Read the full story.

Speaking at a policy roundtable hosted by the OECD in Paris, he emphasized a new approach that focuses on creating clear and consistent rules.

Atkins introduced a proposal that would allow companies offering crypto services, such as trading, lending, and staking, to operate under a single regulatory system.

These platforms, described as “super-apps“, would be able to provide various services within a single framework while offering options for how users store their digital assets.

The proposed changes fall under the SEC’s Project Crypto, a program designed to modernize financial rules for digital markets. According to Atkins, the groundwork has already been laid by the President’s Working Group on Digital Asset Markets.

He noted that this new direction would avoid burdening businesses with overlapping or unnecessary rules.

He added that the SEC’s job is not to create hurdles but to offer guidance that makes it easier for honest businesses to grow. Atkins stressed that only the amount of regulation needed to protect users should be applied.

Furthermore, Atkins acknowledged the European Union’s approach as a possible model. He stated that the MiCA framework provides a comprehensive set of rules for digital assets.

To close his remarks, Atkins called for more international cooperation. He noted that working together can help countries build markets that are safer, more accessible, and more open to innovation.

At the recent Wyoming Blockchain Symposium in Jackson Hole, Atkins shared his thoughts on how the agency plans to approach cryptocurrencies. What did he say? Read the full story.

The Inspector General confirmed the records were permanently deleted, which raises concerns about how the agency manages and preserves important communications.

According to the SEC, it uses a system that wipes government-issued devices if they remain disconnected from the network for more than 45 days.

In response, Coinbase

$2.33B

has asked a federal court in Washington, DC, to issue sanctions against the SEC, require faster discovery, and order the release of all remaining records.

In its filing, Coinbase said the destruction has caused harm that cannot be fixed and urged the court to halt a “destroy-and-delay” approach.

The company also pointed to the Freedom of Information Act disputes. The SEC first blocked Coinbase’s requests by claiming exemptions tied to law enforcement. That stance changed after Coinbase sued in June 2024.

Coinbase stated that the SEC could have processed or at least protected the records in 2023 if it had carried out timely searches.

Chief Legal Officer Paul Grewal stated in a post on X that the SEC “destroyed documents they were required to preserve and produce”, and pointed to the Inspector General’s findings as proof.

Meanwhile, a group of international regulators and exchange associations recently asked the SEC to take a stance on tokenized stocks. What did they say? Read the full story.

In a letter to the Securities and Exchange Commission (SEC), the company argued that clearer definitions are necessary to prevent confusion regarding the regulation of blockchain tokens.

Wintermute focused specifically on “network tokens”, digital assets that are essential to running decentralized platforms. These tokens help blockchain systems operate by enabling functions such as transaction validation and access to services.

According to Wintermute, this distinguishes them from financial instruments like stocks or bonds, which are typically the primary focus of securities regulations.

Bitcoin
BTC


$110,396.28

and Ethereum
ETH


$4,281.76

were highlighted as examples of tokens that should clearly not be treated as securities. The company warned that if such tokens were misclassified, even basic trades involving them might require complex regulatory approval. This would likely reduce trading activity in the US and increase costs for participants.

Wintermute also noted that labeling these tokens as securities could push developers and investors to relocate their activities to countries with more favorable regulations.

The company compared these tokens to items like real estate or rare collectibles, which people buy to earn money later, but that are not classified as securities.

According to Wintermute, the main difference is that network tokens are designed to facilitate system functionality, rather than granting ownership or profit rights to individuals.

Recently, a group of international regulators and exchange associations has asked the SEC to take a stance on tokenized stocks. What did they say? Read the full story.

The submission came from Daniel Bruno Corvelo Costa and was addressed to the SEC’s Crypto Assets Task Force.

The document, titled the Post-Quantum Financial Infrastructure Framework (PQFIF), outlines how digital asset systems might defend themselves from quantum computers that could one day crack the encryption methods used to secure crypto assets.

At the core of the concern is the possibility that quantum machines, once powerful enough, could break the cryptographic tools that keep crypto funds secure.

The proposal noted that current encryption methods protect a huge amount of value, and failure could result in investor losses and disruptions to exchanges and wallet providers.

A concern raised is the strategy known as “Harvest Now, Decrypt Later“. In this scenario, attackers store encrypted data today and wait for future quantum breakthroughs to access it. The PQFIF urged early action before that window of opportunity opens.

The framework recommends regular checks to identify weaknesses in platforms that hold or manage crypto assets. High-value systems, such as centralized exchanges and institutional wallets, should be prioritized.

Once weak areas are found, platforms could begin shifting to quantum-safe algorithms. This would include a mix of current encryption methods and new approaches designed to resist quantum attacks.

Recently, Justin Drake, a researcher at the Ethereum Foundation, introduced a proposal called “Lean Ethereum”. What did it say? Read the full story.

The Office of the Inspector General, which acts as an independent reviewer for the SEC, explained on September 3 that the messages were lost due to a combination of technical problems, overlooked warnings, and a misapplied policy.

The issue began on July 6, 2023, when Gensler’s work phone stopped linking properly with the SEC’s device management system. While the phone was still working and in use, its status was shown as “inactive” to the IT team, an alert that went unnoticed.

On August 10, 2023, the agency’s tech department announced that any phone not connected to the system for 45 days would be automatically wiped. Gensler’s phone met that condition and was cleared without any manual checks.

Then, on September 6, 2023, Gensler returned to the SEC offices and saw that certain apps were missing. Unaware that the phone had already been wiped, the support team tried to fix the issue.

However, instead of restoring the content, they reset the phone entirely, which erased any remaining data, including text messages from October 18, 2022, to September 6, 2023.

The report pointed to several other issues that contributed to the loss, including a lack of communication between IT teams and external service providers.

Meanwhile, SEC Chair Paul Atkins recently shared his views on how the agency plans to handle digital assets going forward. What did he say? Read the full story.