New SEC Chair Criticizes US Crypto Crackdown Under Biden

Key Points:

• Donald Trump has nominated Paul Atkins, a crypto advocate, to lead the SEC.
• The new SEC Chair attributes the collapse of FTX partly to rigid U.S. regulations.

According to Bloomberg, Paul Atkins, Donald Trump’s pick to head the SEC, has inflamed controversy by blaming U.S. government policy for the collapse of FTX, the crypto exchange founded by Sam Bankman-Fried.

Read more: New SEC Chair Appointed by Donald Trump

New SEC Chair Criticizes U.S. Crypto Policies

The FTX collapse, which revealed fraudulent activities within the firm, led to a wave of bankruptcies throughout the digital asset industry that cost investors billions.

Atkins is a former commissioner with the SEC and is chief executive of Patomak Global Partners, a Washington consulting firm that was listed as a creditor in FTX‘s bankruptcy. The firm advised FTX through an agreement in January 2022, several months before the exchange blew up. It also lobbied on behalf of FTX, court filings show.

On a podcast last year, the new SEC Chair pointed the finger at what he called U.S. regulatory rigidity for driving crypto innovation and companies. He blasted the SEC for its enforcement-first attitude and praised the Token Safe Harbor Act, a proposal from SEC Commissioner Hester Peirce.

The act would give developers of decentralized networks a grace period before being subject to federal securities laws. Peirce, a former colleague, had strong support for Atkins’ nomination, calling him an ideal choice for the role.

Trump’s Pick Signals Potential Shift in SEC Crypto Oversight

Atkins endorsement by Trump is sure to indicate some shift to a pro-crypto policy. That would be in stark contrast to the wide-ranging crackdown of the Biden administration after the failure of FTX. Now, there is a president who had previously been ambivalent toward digital currencies, encouraging the development of an onshore environment within the United States for crypto firms.

The new SEC Chair will have to be confirmed by the Senate and will take over from the current SEC Chair, Gary Gensler, as he steps down on January 20. Such leadership would potentially mark a significant shift from Gensler’s strict regulatory posture.