NEW YORK — The Securities and Exchange Commission is still looking to formalize an “innovation exemption” for companies to build on digital assets and other innovative technologies in the U.S., potentially as soon as the end of the quarter, said agency Chair Paul Atkins.
While acknowledging that the current government shutdown had “hamstrung” the SEC’s ability to make progress on rulemaking, Atkins said working on this exemption is still his priority for the end of the year or the first quarter of 2026, he said at a Futures and Derivatives Law Report event hosted by the law firm Katten Muchin Rosenman LLP in midtown Manhattan on Tuesday.
The SEC chair opened with one of his now-common refrains: That crypto is “job one” and the agency has become a pro-innovation body looking to encourage developers and entrepreneurs to build in the U.S.
“As you know, we’ve had four years, at least, of repression of that industry, and with the result of pushing things abroad, rather than having innovation being done,” Atkins said during a panel with former SEC Commissioner Troy Paredes.
The agency intends to initiate the rulemaking by the end of 2025 or during the first quarter of 2026, he said, depending on what happens with the ongoing U.S. government shutdown.
“We’ll see where that goes, but I have confidence [we’ll] be able to do it,” he said on the panel.
Pursuing formal rulemaking in crypto would finally put the agency beyond the regulation-by-enforcement utilized in the previous administration or the informal guidance and staff notes so far used in this one.
During a Q&A with reporters afterward, he said the exemption, which he pushed for last month, is something he was hoping to have “squared away.”
“That’s one of the top priorities to try to get that because I want to be welcoming to innovators and have them feel like they can do something here in the United States, so that they don’t have to flee to some foreign jurisdiction.”
The ongoing government shutdown is hampering the agency’s work, Atkins said.
While there are “essential tasks” that the agency can take on, rulemaking — including crypto rulemaking — is paused.
Market structure bill
Atkins praised Congress’ work toward passing laws addressing cryptocurrencies during his panel, pointing to the stablecoin-focused GENIUS Act, though he noted that the SEC did not have a major role with that bill.
“Market structure is an issue there on the bill, and so we’ll see where that goes,” he said. “I’m optimistic.”
Speakers at a prior panel were less confident that a market structure bill will make its way out of Congress, at least before 2025 ends.
Summer Mersinger, the CEO of industry lobbyist group Blockchain Association and a former commissioner at the Community Futures Trading Commission, said she gave the bill a 51% or 52% chance of passing this year.
Greg Xethalis, a partner and general counsel at venture firm Multicoin Capital, said lawmakers should be appreciated for their work on the bill, while CoinFund’s Chris Perkins said he did not believe the bill would happen.
Stablecoins
The GENIUS Act, the first major crypto-focused bill to become law in the U.S., has started to yield preliminary results, with regulators at the Treasury Department publishing proposed rules for the stablecoin sector earlier this year.
Xethalis said much of what will happen next from a developer front is plumbing.
“Now that we have the rules at Treasury being written for the GENIUS Act, we’re going to see a Cambrian explosion of people actually starting to utilize this stuff on a day-to-day basis,” he said, pointing to Visa integrating USDC into their payment growth tooling as an example of how people might already be “indirectly us[ing] crypto.”
Similarly, Mersinger said stablecoin use could continue to grow, pointing to collateral in fund transfers and other types of financial contracts as a use case.
