Almost immediately after President-Elect Trump posted his announcement of Paul Atkins to replace Gary Gensler as the SEC Chair, the crypto sector, including Bitcoin, rallied, alongside the equity market rally led by the tech sector. Cheers from crypto sector leadership followed. Sure, Chairman Gensler has been no friend of Crypto, begrudgingly approving the trading of Bitcoin-based ETFs and more significantly engaging in rule-making through enforcement. It makes sense then that the expected exit of Chairman Gensler would be applauded, but why Paul Atkins?<\/p>\n\n\n\n
SEC Chair nominee Atkins served as an SEC Commissioner with Chairmen Harvey Pitt, Bill Donaldson and Chris Cox, from 2002-2008 and since, has served as the founder and CEO of Patomak Global Partners, consulting for the securities and crypto industries on all manner of topics.<\/p>\n\n\n\n
Last February, while in the private sector, SEC Chair nominee Atkins agreed to be interviewed on an outwardly Libertarian podcast. He broadly declared that while the SEC should prosecute illegal activity, like FTX, the agency should also otherwise accommodate innovation to encourage the flow of capital. He stressed that regulators should be \u201cattuned\u201d to opportunities for innovation and \u201caccommodate\u2026reasonably\u2026things that are out there to advance cost savings and innovation.\u201d Specifically, \u201c[t]he SEC should be there with its ear to the ground to figure out which way things are moving and should accommodate activity that\u2019s not criminal and enable markets to flourish because\u2026if it challenges incumbents\u2026and it helps to bring down costs for investors and for people who are trying to raise capital\u2026that\u2019s the reason why we have financial markets and to have capital find its way\u2026to businesses.\u201d[1]<\/a> This was hardly the regulation through prosecution which was a hallmark of the administration under Chairman Gensler.<\/p>\n\n\n\n While stressing innovation, SEC Chair nominee Atkins was certainly no fan of FTX, SBF or their fraud. But at its core, it was not a problem with crypto: \u201cIt happened to happen in the crypto space, but when you peel back the layers it\u2019s the same thing that happened elsewhere, someone without proper controls without proper governance of the corporation uses other peoples\u2019 money to do things without accountability.\u201d Like Madoff decades before, SEC Chair nominee Atkins noted that \u201c[SBF] was not accountable to anyone, there was no board.\u201d <\/p>\n\n\n\n But innovation aside, there is still the fundamental question of whether crypto qualifies as a security and appropriate for SEC regulation. While the SEC under Chairman Gensler and defense counsel fought vigorously over whether crypto did or did not meet the Howey<\/em> test,[2]<\/a> a case decided over 60 years before Satoshi Nakamoto first implemented the blockchain, SEC Chair nominee Atkins presented a different view: he noted that the Howey <\/em>case is \u201cquite old, it\u2019s arguable whether or not it\u2019s still current\u2026I could see the Supreme Court reexamining that for its coherence to the current environment and whether or not it needs to be tweaked.\u201d In the meantime, while the regulatory issues are being resolved, SEC Chair nominee Atkins signaled that the cryptocurrency industry needed certainty in regulation akin to the SEC\u2019s current safe harbor rules for securities offerings: \u201cSafe harbors have done a good job in giving certainty to industry and of course in this particular industry [cryptocurrency] we need certainty, of course there\u2019s a dearth of that now.\u201d[3]<\/a> <\/p>\n\n\n\n As someone who is committed to promoting innovation and workable regulation, while prosecuting real bad actors, it is no wonder the markets and commentators have applauded the nomination of Paul Atkins so loudly.<\/p>\n\n\n\n Disclaimer:<\/strong> The content provided is for informational purposes only and does not constitute financial, investment, or legal advice. While our law firm has substantial experience in cryptocurrency law and regulation, we do not offer investment advice or opinions on cryptocurrency as an investment. Consult a financial advisor before investing.<\/p>\n\n\n\n [1]<\/a> See <\/em>Keep Your Government Hands Off My Crypto | Guest: Paul Atkins | Ep 215 – YouTube<\/a>. <\/p>\n\n\n\n [2]<\/a> Sec. and Exch. Comm\u2019n v. W.J. Howey Co.<\/em>, 328 U.S. 293 (1946).<\/p>\n\n\n\n [3]<\/a> See <\/em>The Capital ’19: Fireside Chat with Paul Atkins, Former Commissioner, U.S. SEC – YouTube<\/a>. <\/p>\n","protected":false},"excerpt":{"rendered":" Almost immediately after President-Elect Trump posted his announcement of Paul Atkins to replace Gary Gensler as the SEC Chair, the crypto sector, including Bitcoin, rallied, alongside the equity market rally led by the tech sector. Cheers from crypto sector leadership followed. Sure, Chairman Gensler has been no friend of Crypto, begrudgingly approving the trading of … <\/p>\n
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