President-elect Donald Trump’s nomination of Paul Atkins as the next chair of the Securities and Exchange Commission (SEC) is being hailed as a potential turning point for the cryptocurrency industry. However, experts caution that meaningful regulatory changes may take time.

Who is Paul Atkins?

Paul Atkins, a Republican who served as an SEC commissioner from 2002 to 2008 under President George W. Bush, is known for his pro-innovation stance and emphasis on proportional enforcement. During his tenure, Atkins opposed excessive fines for corporate misdeeds and advocated for nuanced regulatory approaches.

Following his SEC stint, Atkins founded Patomak Global Partners, a regulatory consulting firm. Notably, Patomak advised the now-collapsed FTX exchange. Despite this association, Atkins attributed the FTX debacle to inadequate U.S. crypto regulations and fraudulent activities by its leadership.

Atkins has also been a staunch advocate for crypto innovation, co-chairing the Chamber of Digital Commerce’s Token Alliance since 2017. He has criticized the SEC’s “regulation-by-enforcement” strategy under outgoing chair Gary Gensler.

SEC’s Changing Dynamics

Atkins’ nomination comes amid significant turnover at the SEC. Current chair Gary Gensler and Democratic commissioner Jaime Lizarraga have announced their departures, potentially leaving the agency with a Republican majority in 2024. Atkins could further bolster this majority if confirmed, joining pro-crypto commissioners Hester Peirce and Mark Uyeda, both of whom have previously worked under him.

What Could Change for Crypto?

Industry insiders believe Atkins’ appointment could mark a shift toward clarity and collaboration in crypto regulation. Cody Carbone, President of the Digital Chamber of Commerce, notes that Atkins’ familiarity with SEC staff could help streamline future policies.

Atkins has expressed support for measures like the Token Safe Harbor Act, which provides a grace period for crypto developers before requiring SEC registration. However, experts like Charlyn Ho, founder of Rikka Group, suggest the focus will be on removing regulatory roadblocks rather than introducing sweeping new rules like Europe’s Markets in Crypto-Assets Regulation (MiCA).

Challenges Ahead

Despite optimism, immediate change is unlikely. The SEC’s ongoing lawsuits against major crypto firms like Coinbase, Ripple, and Kraken remain tied to precedents set under Gensler. Ho notes that altering the agency’s legal stance will require procedural adherence and justification.

“If Atkins wants to change the SEC’s position, he can’t just declare it,” says Ho. “There are legal processes to follow, and existing lawsuits can’t be dropped without cause.”

Outlook for the Crypto Industry

While Atkins’ leadership may eventually lead to a more supportive regulatory environment, industry pundits caution against expecting rapid overhauls. Nonetheless, his appointment signals a potential thaw in the SEC’s previously adversarial stance toward crypto.

As Congress prepares to confirm Atkins’ nomination in 2025, the crypto industry awaits a new chapter in its complex relationship with U.S. regulators.

Stay tuned for more updates on how Atkins’ SEC may redefine the future of crypto in America.