April 21, 2025, Paul Atkins was sworn in as Chair of the U.S. Securities and Exchange Commission (SEC). As of April 22, 2026, Atkins has led the SEC for a full year. Over this period, the SEC’s regulatory stance on digital assets underwent a fundamental shift—from the enforcement-centric, hardline approach under former Chair Gary Gensler to a policy-driven model focused on rulemaking and inter-agency coordination. In his anniversary address at the Economic Club of Washington, Atkins formally unveiled a four-point plan centered on the A-C-T (Advance, Clarify, Transform) strategy, marking the end of the era of "regulation by enforcement."
How Does the A-C-T Strategy End the SEC’s "Regulation by Enforcement" Approach?
Atkins distilled his regulatory philosophy into the three-letter A-C-T framework. Advance refers to regulatory modernization, aligning the SEC’s rulebook with the real needs of digital asset markets. Clarify focuses on defining the regulatory boundaries for digital assets, ending the longstanding uncertainty among market participants about compliance pathways. Transform aims to reshape the regulatory system based on core principles, ensuring the SEC’s toolkit is fit for innovation. This framework stands in sharp contrast to the previous Biden-era "prosecute, silence, stagnate" enforcement-first approach. In his speech, Atkins stated that the SEC is returning to its Congressional mandate: "protect investors, maintain market order, and facilitate capital formation." He also criticized past regulatory overreach for increasing market friction and uncertainty.
What Substantive Changes Have Occurred in Enforcement Data?
Changes in enforcement data provide the clearest quantitative evidence of this policy shift. According to an April 2026 report by Brattle, the SEC initiated only 92 enforcement actions in the first half of fiscal year 2026 (October 2025 to March 2026), a roughly 59% decrease from the average of 225 actions during the first half of fiscal years 2018–2025. Enforcement actions against non-individual entities fell to their lowest level since 2018, accounting for just 22% of all cases, while actions against individuals hit a record high, exceeding half of all cases. Meanwhile, the SEC’s own enforcement report for fiscal year 2025 showed a total of 456 actions, down about 30% from 2024, and reclassified several past crypto registration cases as "misinterpretations of federal securities law," admitting these cases "did not provide substantive benefits to investors."
How Does the Five-Category Token Framework Distinguish Digital Securities from Non-Securities?
In November 2025, Atkins first proposed a token classification plan, and in his anniversary address, released a comprehensive five-category digital asset framework. The framework clearly defines the following four asset types as "non-securities": digital commodities (including Bitcoin, Ethereum, and other assets based on decentralized networks); digital collectibles (primarily art and music NFTs); digital tools (such as utility tokens for identity verification); and payment stablecoins that meet specific legal criteria. Only digital securities remain fully subject to SEC securities law—namely, tokenized traditional securities like stocks and bonds on-chain. This classification system provides the clearest compliance guidance for the crypto industry since the Howey Test was established.
How Will the "Innovation Exemption" Change Compliance Paths for Tokenized Securities?
As a key institutional design in the four-point plan, Atkins announced the SEC would soon launch an "Innovation Exemption" mechanism. This will offer market participants a 12–36 month transition window, allowing compliant on-chain trading of tokenized securities without requiring immediate completion of the full registration process. Positioned as a "bridge" before long-term rules are enacted, this arrangement aims to lower the compliance entry barrier for innovative projects. Simultaneously, the SEC has initiated "Project Crypto" to drive market on-chain migration and develop lasting industry rules. Atkins noted that past U.S. regulatory approaches to crypto assets led to an exodus of innovation, and the Innovation Exemption is a critical step to "bring innovation back to the United States."
Does SEC–CFTC Coordination End the Regulatory Void?
Another persistent challenge for the crypto industry has been the unclear jurisdictional boundaries between the SEC and the Commodity Futures Trading Commission (CFTC). In February 2026, the two agencies signed a historic Memorandum of Understanding (MOU), unifying key definitions, clarifying jurisdictional divisions, and coordinating oversight in shared areas like digital assets. On March 17, 2026, the SEC and CFTC jointly released a 68-page interpretive guidance titled "Application of Federal Securities Laws to Certain Crypto Assets and Related Transactions," further clarifying that most crypto assets do not fall under the securities category. Atkins stated that the agencies are transforming the former "regulatory no-man’s land" into fertile ground for innovation. However, it’s worth noting that the SEC is still awaiting Congressional passage of a market structure bill to formally define its authority over crypto assets—until then, the SEC’s crypto regulatory framework remains in a transitional phase of "administrative guidance plus case-by-case handling."
How Has the ETF Approval Logic Changed?
During Atkins’s first year in office, progress in crypto ETF approvals has been another clear indicator of the policy shift. Under Gensler, the SEC only approved Bitcoin spot ETFs and Ethereum spot ETFs, with lengthy legal battles. Since Atkins took over, ETF approvals have accelerated and expanded. In September 2025, the SEC announced that crypto ETFs would be subject to general listing standards, and Hashdex was approved to launch a crypto index ETF covering BTC, ETH, XRP, and SOL. In October, the SEC approved Litecoin and Hedera ETFs. In March 2026, the SEC conducted a "collective approval," officially approving core rule changes for spot ETFs covering 24 tokens including XRP, Solana, and Litecoin. The shift in approval logic is evident in two dimensions: the expansion of scope—from single tokens to multi-token and multi-asset classes—and improved efficiency, moving from case-by-case battles to framework-based approvals.
Controversy and Divergence: What Resistance Does the Regulatory Shift Face?
While the crypto industry broadly welcomes Atkins’s regulatory shift, Congressional criticism is intensifying. Democratic lawmakers focus their concerns on SEC’s withdrawal of certain investigations and enforcement actions involving companies linked to Trump and his family, raising potential conflicts of interest. Massachusetts Senator Elizabeth Warren accused Atkins of misleading Congress during testimony and noted that SEC enforcement actions in fiscal year 2025 fell to their lowest level in a decade. Additionally, as Atkins advances a federal regulatory framework, state regulators continue aggressive enforcement, creating a complex compliance landscape. The New York Attorney General recently filed lawsuits against multiple crypto platforms, highlighting the ongoing "regulatory tug-of-war" between federal and state governments. The direction of the regulatory shift is set, but fully implementing the framework will require overcoming multiple obstacles.
How Will Compliance Paths for Crypto Projects Evolve?
Based on the regulatory framework unveiled at Atkins’s one-year mark, compliance paths for crypto projects in the U.S. are becoming clearer. First, project teams can use the five-category token framework to preliminarily determine the legal nature of their assets. If an asset falls within the four "non-security" categories, it is exempt from the SEC’s full securities registration requirements, but must still consider whether the issuance and sale process constitutes an investment contract—even if the asset itself isn’t classified as a security, the manner of issuance and sale could bring it under securities law. Second, the SEC is advancing a set of registration exemptions, including "Innovation Exemption" and "Fundraising Exemption," to provide compliant fundraising options for crypto businesses at different stages. Third, the SEC has proposed the concept of an "investment contract safe harbor," allowing crypto assets to exit securities law constraints once issuers fulfill their core management commitments. The gradual rollout of this framework means crypto projects no longer have to choose between "compliance gaps" and "offshore migration."
Summary
Paul Atkins’s first year as SEC Chair has witnessed a historic shift in U.S. digital asset regulation from "enforcement first" to "rules-driven." The A-C-T strategy set three core directions: advancing regulatory modernization, clarifying boundaries, and reshaping the rulebook. The five-category token framework provides the industry with the clearest compliance guidance for 2026. Enforcement actions fell by about 59% year-over-year, ETF approvals expanded in scope and efficiency, and SEC–CFTC coordination made real progress. However, delays in Congressional legislation, ongoing pressure from Democratic lawmakers, and jurisdictional disputes between federal and state authorities continue to inject uncertainty into the ultimate implementation of this regulatory shift. For the crypto industry, the direction established by Atkins’s anniversary plan is clear—the real test lies in the full execution and continuous improvement of the institutional framework.
FAQ
Q: What are the five categories in Atkins’s token classification framework?
The framework divides digital assets into five categories: digital commodities (such as Bitcoin and Ethereum), digital collectibles (such as art NFTs), digital tools (such as identity verification tokens), payment stablecoins, and digital securities (tokenized traditional securities on-chain). The first four are explicitly defined as "non-securities" and are not subject to the SEC’s comprehensive securities law jurisdiction. Only digital securities must comply with full securities registration requirements.
Q: By how much did SEC enforcement actions decrease during Atkins’s tenure?
According to Brattle, the SEC initiated only 92 enforcement actions in the first half of fiscal year 2026, a roughly 59% decrease from the average of 225 actions in the first half of fiscal years 2018–2025. SEC’s own data shows 456 enforcement actions in fiscal year 2025, down about 30% from 2024. The SEC has acknowledged that previous crypto enforcement actions set "misleading expectations," and has pledged to redirect resources toward combating fraud and other behaviors most harmful to investors.
Q: When will the "Innovation Exemption" take effect, and what scenarios does it cover?
SEC Chair Atkins announced the upcoming Innovation Exemption in his April 21, 2026 anniversary speech, but the official rule text has not yet been released. The mechanism aims to provide a 12–36 month transitional framework for compliant on-chain trading of tokenized securities, allowing market participants to conduct compliant trials before long-term rules are enacted, without needing to complete full registration immediately. The specific effective date and scope will depend on the SEC’s official rule announcement.
Q: What issues did the SEC–CFTC Memorandum of Understanding (MOU) resolve?
In February 2026, the SEC and CFTC signed an MOU, unifying key definitions, clarifying jurisdictional boundaries, and establishing coordinated oversight mechanisms in shared areas like digital assets. The MOU aims to eliminate the longstanding "regulatory vacuum" between the two agencies, reducing redundant and conflicting compliance requirements across domains. In March 2026, the agencies jointly released interpretive guidance, further clarifying that most crypto assets are not securities.
Q: How can crypto projects determine whether their tokens are securities?
According to the SEC’s classification framework, project teams can make a preliminary determination based on the following: whether the token operates on a decentralized network (digital commodity), whether it has collectible properties (digital collectible), whether it serves a functional purpose (digital tool), whether it is a compliant payment stablecoin, or whether it is a tokenized traditional security. It’s important to note that even if the asset itself is not a security, the issuance and sale method may constitute an investment contract and thus fall under securities law. Project teams are advised to consult professional compliance advisors before official issuance and to analyze specifics using SEC interpretive guidance.
