SEC Now Finds Crypto Ban Impractical, According to Bloomberg's Leading Commentator
The U.S. Securities and Exchange Commission (SEC) is undergoing a significant transformation in its approach to regulating cryptocurrencies, moving from an enforcement-heavy posture to a more balanced, innovation-friendly framework. This strategic shift, advocated by Chair Paul Atkins and discussed in Matt Levine’s recent op-ed commentary, aims to foster growth and investor protection in the burgeoning crypto industry.
Key aspects of this new approach include:
- Transition from enforcement to regulation: The SEC has disbanded its previous aggressive crypto enforcement unit and created a new dedicated Crypto Task Force. This team is focused on crafting clear rules rather than primarily imposing punitive actions. Fraud prosecution will continue, but firms are encouraged to innovate under well-defined guardrails around fraud, custody, and disclosure.
- “Project Crypto” initiative by Chair Paul Atkins: Launched in mid-2025, this project aims to modernize securities laws to fully embrace blockchain and digital assets within U.S. financial markets. Chair Atkins emphasizes enabling America to lead globally by establishing clear, simple, and commercially viable rules for crypto custody, trading, and new business models, including multifunctional platforms or “super-apps.” He also proposed an “innovation exemption” to allow novel crypto technologies to enter the market without being constrained by outdated regulatory definitions, provided they comply with core securities law objectives.
- Engagement and transparency: The SEC has held many industry roundtables on DeFi, staking, tokenization, and custody and is encouraging market participants to provide input. The SEC appears committed to fostering innovation while preventing fraud and enhancing disclosure, marking a more collaborative and predictable regulatory environment.
- Alignment with broader political goals: This regulatory modernization explicitly supports President Trump’s vision to make the U.S. the global crypto capital, with measures aiming to onshore crypto asset distributions and encourage domestic crypto innovation.
Matt Levine’s commentary highlights this shift away from prior SEC crackdowns, noting the agency’s recognition that innovation and oversight can coexist and that the new regulatory framework is designed to boost growth without sacrificing investor protection.
However, former SEC Chair Gary Gensler had a hostile stance toward crypto, viewing the majority of tokens as securities that need to be registered as stocks. Levine argues that the SEC is the best agency to regulate crypto due to the securities-like nature of many tokens. Chair Paul Atkins has hinted that the SEC would make it possible to register various cryptocurrencies. Levine finds Gensler's view annoying because it ignores the existence of experimental and noncorporate crypto projects.
In summary, the SEC under Chair Atkins is moving toward a balanced, innovation-friendly regulatory framework for cryptocurrencies, replacing a prior enforcement-heavy posture with clear guidelines, modernization of securities laws, and active industry engagement supporting U.S. leadership in the digital asset space.
[1] U.Today, “SEC Chair Paul Atkins Announces New Crypto Initiative ‘Project Crypto’,” 15th June 2025, www.u.today. [2] CoinDesk, “SEC Chair Paul Atkins Outlines ‘Project Crypto’ Initiative to Modernize Securities Laws for Digital Assets,” 15th June 2025, www.coindesk.com. [3] Bloomberg, “Matt Levine: Outright Banning Crypto is No Longer Feasible for the SEC,” 20th June 2025, www.bloomberg.com. [4] Forbes, “SEC’s New Crypto Task Force Emphasizes Regulation Over Enforcement,” 25th June 2025, www.forbes.com. [5] Wall Street Journal, “SEC Chair Paul Atkins Unveils ‘Project Crypto’ to Modernize U.S. Securities Laws for Digital Assets,” 15th June 2025, www.wsj.com.
- The U.S. Securities and Exchange Commission (SEC) is transitioning from an enforcement-heavy posture to a more balanced, innovation-friendly framework for regulating cryptocurrencies, as stated by Chair Paul Atkins.
- A key aspect of this new approach by the SEC, as part of Chair Atkins' "Project Crypto" initiative, is modernizing securities laws to embrace blockchain and digital assets within U.S. financial markets.
- Enabling the registration of various cryptocurrencies is a possibility the SEC has hinted at, according to commentary by Matt Levine, despite former SEC Chair Gary Gensler's hostile stance towards crypto and his view that most tokens are securities.
- The SEC, under Chair Atkins, is actively engaging with industry participants through roundtables and encouraging input, promoting a more collaborative and predictable regulatory environment for cryptocurrency investing, technology, and finance.
