A New Direction for Digital Asset Regulation: SEC Chairman Atkins' June 2025 Testimony in Context

On June 3, 2025, SEC Chairman Paul S. Atkins delivered testimony before the United States Senate Appropriations Subcommittee on Financial Services and General Government. Framed as a recommitment to the agency's foundational principles, the testimony also served as a clear reflection of the deregulatory tone of the Trump administration. Atkins' remarks offer both an ideological and practical roadmap for the Securities and Exchange Commission, particularly for registered investment advisers (RIAs) and broker-dealers (BDs) navigating the evolving regulatory landscape for digital assets.

The Chairman began by situating his return to the SEC as a restoration of purpose: "It is a new day at the SEC. I am determined that we return to our core mission that Congress set for us more than 90 years ago." This core, as Atkins reiterated, consists of a three-part mandate—protecting investors, facilitating capital formation, and maintaining fair, orderly, and efficient markets.

A central theme of the testimony was a perceived return to clear, economically grounded rulemaking. "Regulation should be smart, effective, and appropriately tailored within the confines of our statutory authority," Atkins stated. He emphasized that the Commission's role is not merely to promulgate rules, but to ensure those rules achieve their intended economic and protective outcomes without creating excessive burdens or undermining capital formation.

This philosophy is particularly salient in the context of digital asset markets. From 2017 until his nomination, Atkins worked in the private sector to develop best-practices for the crypto industry, leading to the formation of his view that "ambiguous or nonexistent regulations in this space created uncertainty and inhibited innovation." The lack of a coherent framework, he warned, also "invites fraud."

Under his leadership, the SEC intends to shift decisively away from what many market participants have characterized as regulation-by-enforcement. "Policymaking will be done through notice and comment rulemaking not through regulation-by-enforcement," Atkins declared. The Commission, he continued, "will utilize its existing authorities to set fit-for-purpose standards for market participants," while focusing enforcement efforts squarely on "violations of these established obligations, particularly as they relate to fraud and manipulation."

To drive this agenda, the Commission has established a new Crypto Task Force, led by Commissioner Hester Peirce and co-founded with Commissioner Mark Uyeda. The task force has already held four roundtables on critical topics: further defining security status, tailoring regulation for crypto trading, custody considerations, and tokenization. A fifth roundtable on decentralized finance is forthcoming. This effort represents a deliberate shift away from policymaking silos and toward an integrated approach to digital asset regulation.

"I am confident that Commissioner Peirce, known for her principled and tireless advocacy for common-sense policy, is the right person to lead the Crypto Task Force’s effort to come up with a rational regulatory framework for crypto asset markets," Atkins noted. He went on to affirm that "clear rules of the road are necessary for investor protection against fraud—not the least to help them identify scams that do not comport with the law."

Beyond the digital asset agenda, Atkins signaled structural and philosophical changes throughout the agency. He committed to a thorough technology infrastructure review, a consolidation of functions where appropriate, and a reorganization designed to increase efficiency. "Innovation should be ingrained into the culture SEC-wide and not limited to a relatively small office," he said, explaining his intention to disband the SEC's Strategic Hub for Innovation and Financial Technology (FinHub).

Chairman Atkins also provided insight into the agency's fiscal and organizational posture. The FY 2026 budget request of $2.149 billion reflects a flat trajectory relative to prior years, with a headcount reduction of 447 full-time equivalents due to attrition. Despite these reductions, the SEC anticipates potential expansion of its mandate, including a possible transfer of PCAOB functions to the Commission: "If Congress approves this budget request, we anticipate that this funding could support such a transfer of the PCAOB functions into the SEC in FY 2026."

The speech concluded with a reaffirmation of the SEC's mission in service of both investors and economic growth. "This SEC will work to protect investors from fraud, keep politics out of how our securities laws and regulations are applied, and advance clear rules of the road that encourage investment in our economy to the benefit of all Americans," Atkins said. He continued: "This SEC will work to ensure that regulations promote capital formation rather than stifle it. We will work together to ensure American investors get disclosures that actually help them understand the true risks of an investment."

For RIAs and broker-dealers, particularly those involved with digital assets, Chairman Atkins' testimony signals a meaningful inflection point. It underscores a regulatory environment that will hopefully be more procedurally transparent, economically calibrated, and innovation-focused—while remaining anchored in a vigorous approach to fraud prevention and market integrity. In Atkins' words: "This is a pivotal moment for our economy. Entrepreneurs, businesses, and individuals here at home and across the globe are eager to invest in America."

The direction is clear: the SEC under Chairman Atkins will pursue structured, rule-based oversight that seeks to empower rather than constrain market participants. In light of his testimony and the SEC’s apparent evolving approach to rulemaking, registrants should remain actively engaged in regulatory developments. Firms can position themselves effectively by monitoring rule proposals, participating in comment periods, and maintaining open lines of communication with legal and compliance counsel.

Within their compliance programs, registrants should prioritize a framework that is both agile and principle-driven: codifying internal controls that reflect current law, while retaining the flexibility to adapt swiftly to changes. Upholding investor protection and market integrity remains paramount. As Atkins noted, “clear rules of the road benefit all market participant.” At CRC, we believe that a compliance culture that embraces transparency, sound risk management, and continuous improvement remains just as beneficial, and perhaps even more so.