SEC Goes It Alone: Atkins Builds Crypto Rules Without Congress

Paul Atkins isn't waiting around. The SEC chair has made it clear: his agency will build a comprehensive crypto regulatory framework whether Congress co-operates or not. The signal is unmistakable, and it matters.

The backdrop is grim for legislative crypto fans. The Digital Asset Market Clarity Act—the administration's flagship effort to sort out who regulates what in crypto—collapsed in the Senate on September 15. It failed to muster the 60 votes needed to advance debate. Then came the gut-punch: Patrick Witt, the White House's top crypto negotiator, departed on October 14 after his temporary post as executive director of the White House Crypto Council expired. No successor named. The infrastructure for crypto coordination at the executive level has gone thin.

Rather than fold, Atkins has positioned the SEC as the go-to regulator. In recent weeks, the agency has moved fast. October saw new custody rules addressing how investment advisers and regulated funds hold digital assets for clients—a compliance gap Atkins flagged as a real problem for institutions. Earlier in September, the SEC introduced an Innovation Exemption: a five-year sandbox for tokenized stocks to trade on decentralized exchanges. August brought Regulation Crypto Assets, the agency's first tailored offering framework for certain crypto investment contracts, plus conditional safe harbors for assets that no longer meet the investment contract definition.

Atkins has been explicit about the independence angle. The SEC will establish rules regardless of whether Congress passes anything new. The frameworks they're working with date to 1940. They don't account for an asset class that has grown from curiosity to multi-trillion-dollar reality since Bitcoin's 2008 launch.

Why did CLARITY die? The Senate failure came down to disagreements over ethics provisions limiting government officials' crypto holdings and stablecoin reward structures—disputes entirely unrelated to core market structure. The bill had already sailed through the House with broad bipartisan support and cleared the Senate Banking Committee. Then the procedural wall went up.

Witt's exit compounds things. He'd spent over a year negotiating CLARITY and coordinating the broader digital asset policy agenda. His departure, alongside earlier exits of White House crypto officials David Sacks and Harry Jung, leaves the administration's crypto coordination apparatus understaffed heading into potential post-election transitions.

The regulatory gambit carries trade-offs. Agency-initiated rules create sustainable precedent without needing 60 Senate votes or consensus. But future administrations and commissions can unwind them. Statutory law is stickier. CLARITY was structured partly to provide the durability that executive action simply cannot guarantee.

One stabilising element: Atkins has coordinated closely with CFTC Chairman Michael Selig to align oversight and cut regulatory overlap. Joint memoranda of understanding and complementary initiatives suggest coordinated agency authority might provide some degree of predictability, at least signalling to market participants that digital asset regulation will move forward.

The calculus is clear. Congress is stuck. The White House crypto team is depleted. The SEC is moving. Whether that produces lasting, sensible rules or merely creates a patchwork that gets overturned depends entirely on who's in charge next.

Source & further reading:

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