Securities & Exchange Commission Chair Paul Atkins said Friday he wants to make rules for crypto companies “very straightforward” to give investors more “certainty,” but he cautioned that it may take up to a few years before the rules are in place.
“You want to ask questions first and have people give input to make sure things are correct and there are no loopholes,” he told Yahoo Finance in an interview one day after he launched what he is calling “Project Crypto.”
That process, he added, will take “awhile.” The SEC plans to will start rolling out proposals in the next few months and proceed at a pace on implementing rules that will take into next year and perhaps the following year.
Atkins also said he is open to putting all securities on the blockchain, which would create digital representations of publicly-traded assets.
The writing of new rules and consideration of securities on the blockchain are two examples of how Atkins’ SEC is separating itself from how President Biden’s SEC governed crypto companies.
In the last administration, the SEC declined to write customized rules to govern crypto and often argued many tokens were securities and that companies must comply with rules already on the books.
Atkins’ predecessor, Gary Gensler, also clashed with many of the industry’s top companies and figures via lawsuits and enforcement actions, arguing that many crypto companies were violating securities laws.
President Trump, who appointed Atkins, promised to bring more favorable regulation of the crypto industry to Washington. D.C., if elected.
The pledge has been partially fulfilled in Trump’s first six months as president, with several executive orders hailed by the industry and the passage of a law known as the GENUIS Act that offers the first-ever federal framework governing the use of stablecoins.
Another bill known as the CLARITY Act has passed the House and has been sent to the Senate. That legislation defines what digital assets are considered securities and commodities, which then determines whether federal oversight of those assets belongs to the SEC or the CFTC.
Atkins told Yahoo Finance that the SEC is going to re-examine the application of the so-called Howey test in determining whether an asset is a security and build on it.
The Howey test is a legal standard established by the Supreme Court that helps determine what is a security and subject to federal security laws governed by the SEC. He noted that the SEC has the authority to interpret the term digital asset and how that should comply with the law under the Howey test.
