Cryptocurrency enthusiasts had reasons to celebrate Wednesday after President-elect Donald Trump tapped crypto advocate Paul Atkins for Securities and Exchange Commission chair—but his approach stops short of offering the industry a free pass.
Atkins serves as co-chair to Token Alliance, a lobbying group and initiative of the Chamber of Digital Commerce. He will replace acting chairman Gary Gensler, who announced his resignation in November and whose aggressive stance towards cryptocurrency defined his tenure at the SEC.
The move signals Trump’s promised pursuit of a deregulatory agenda and a broader shift in Washington’s view of cryptocurrency. But while Atkins may be a friendly face to the crypto industry, agency experts say that his leadership is expected to bring key changes to its regulatory framework.
“It’s not going to be the equivalent of the Audubon for crypto, there will be rules, there will still be police fraud,” former SEC Director of Enforcement and current partner at WilmerHale Bill McLucas said.
“While he’s a conservative, he’s also an institutionalist,” he added.
Well-known on Wall Street and no stranger to securities law, Atkins is currently acting CEO of Potomak Global Partners. If confirmed by the Senate, the new post also would mark his second run at the SEC. Atkins previously served as a Republican commissioner to the SEC during George W. Bush’s administration and he is remembered for his strong free-market views and opposition to corporate penalties—a divergence from Gensler.
Tiffany Smith, partner and co-chair of the Blockchain & Cryptocurrency Working Group at WilmerHale, said she suspected penalties for off-channel communication cases, which is when firms registered with the SEC as broker-dealers do not use required firm communication, to be much lower under Atkins’ commission.
In part, she said, Atkins criticized the impact of corporate penalties, as large fines may ultimately impact the shareholders with no propensity to change firm behavior.
“I think he is going to be more disciplined as to where enforcement resources are spent,” she said.
Probably the most prominent change from Gensler’s commission, McLucas and Smith also added that they expect to see “rulemaking” on crypto from Atkins, whom they said has been “productive in trying to get the SEC to issue [crypto] guidance,” especially regarding his work with tokenization.
Gensler’s commission led a crackdown on cryptocurrencies, bringing a dramatic number of enforcement actions for fraud, scams, and other violations. This type of policing is referred to as “regulation by enforcement,” in which the SEC does not hesitate with enforcement actions where there is an area of regulatory uncertainty.
Gensler’s approach has raised wide concern that he hasn’t provided rulemaking or guidance on whether products charged with registration violations are securities in the first place, prompting critics to label him as an enemy of the crypto industry.
“At times you’ve gotta make decisions that are not” for a “fanbase,” Gensler said about his time at the SEC during a fireside chat at the Healthy Markets Association Conference last Tuesday.
When Atkins takes the reins, it’s expected he will impose clear guidelines. He stated that he thought the SEC should be more “accommodating” and “deal straightforwardly with these various [crypto] firms” on a podcast in February of last year.
Jim Lundy, former SEC enforcement supervisor and current partner at Foley & Lardner, said that Atkins will also want to deal with any circulating registration cases left over.
“I would expect that chair Atkins and the new leaders of the Enforcement Division will scrutinize those investigations very closely,” Lundy said. “In all likelihood, the majority, if not the vast majority, of those investigations are going to be closed.”
Lundy previously served under both former Bush and President Barack Obama at the same time Atkins held Commissioner status.
“He was very well-qualified,” Lundy noted. “He’s someone who has a very sophisticated understanding of the marketplace.”
Lundy added that during his time at the SEC, the staff was “discouraged to pursue regulation by enforcement.” When it came to fraud however, Atkins remained a proponent of enforcement.
“[He] required enforcement to be particular, when it came to violations of the anti-fraud provisions of the federal securities laws,” Lundy said. “That area of SEC enforcement interest, I think, will remain.”
Crypto rally
Nevertheless, Trump’s announcement of Atkins for his top police pick on Truth Social Wednesday was met with loud approval from the crypto community. Following the nomination, the price of Bitcoin surged above $100,000—more than doubling how much it was traded for at the start of this year.
This short-lived rally marked a milestone for Bitcoin, but its momentum quickly faltered as it failed to maintain its position above the $100,000 threshold. However, Bitcoin’s long-term prospects remain bullish with many experts predicting a price surge reaching above $200,000 in 2025.
But Ogle—an advisor for the Trump-backed DeFi platform World Liberty Financial and crypto security expert—said that it might be “wishful thinking.”
The amount of literal cash, he said, required to bid Bitcoin from $100,000 to $200,000 grows exponentially, making each step harder to achieve without significant new liquidity.
Trump is rapidly filling his top posts with top Wall Street crypto advocates, with Atkins joined by CEOs Scott Bessent and Howard Lutnick to the Treasury and Commerce secretary positions, respectively.
The president-elect promised to create a “strategic national bitcoin reserve” at a Bitcoin conference in July. While it’s unclear how many of his promises he will fulfill, Trump has already appointed David Sacks as the new crypto “czar” Thursday, capping last week’s win for the crypto world.
“Trump has a notoriously short attention span, and so it just adds another layer to getting things done,” Ogle said.
Correction: An earlier version of this story said Jim Lundy is a partner at Foley & Gardner. He is a partner at Foley & Lardner.
