SEC Chair Paul Atkins says the U.S. lags 10 years in crypto regulation, pledging an “innovation exemption” to accelerate blockchain growth.
The US Securities and Exchange Commission (SEC) is ready to make up for lost time in crypto regulation.
According to SEC Chair Paul Atkins, the country is roughly ten years behind other regions in building fair and modern crypto regulation. He spoke during the DC Fintech Week event in Washington, and called fixing this gap “job one” for the agency.
Building a Framework for Crypto Innovation
Atkins said the SEC wants to attract innovators who left the US due to unclear or restrictive laws. He believes a strong and open framework will encourage them to return. The regulator is now working on an “innovation exemption” that will let crypto firms test new ideas under more flexible rules.
He explained that the SEC already has authority to grant exemptions, and the agency plans to use that power. “We can be very forward-leaning in order to accommodate new ideas,” he said.
Atkins revealed that the SEC hopes to roll out the “innovation exemption” by the end of the year. This exemption would allow crypto startups to bring new products to market without facing heavy compliance demands right away.
The goal is to support creativity while still protecting investors.
He added that the free market will be an important part of this. “If the ideas are not good, the market reaction will tell,” he said.
The Push Toward Crypto Superapps
Another area Atkins pointed out is the development of “superapps.” Think of superapps as digital platforms that combine payments, investing and other financial services in one place.
These all-in-one apps are common in Asia, with companies like WeChat leading the way. However, the US has yet to produce its own version.
Atkins believes that better regulation could change that. He suggested that a clear legal environment would make it easier for American companies to build similar services. “Thinking about regulatory coordination as an app in itself is clever,” he said, hinting that a single framework could connect multiple regulators and reduce confusion.
The SEC is working more closely with other agencies, including the Commodity Futures Trading Commission (CFTC) and the Treasury Department. The aim is to improve oversight and avoid overlapping rules that slow progress.
Atkins also mentioned recent coordination with Congress to modernise securities law. He pointed to the GENIUS Act, which gave formal recognition to stablecoins as an example of progress.
Revisiting the Howey Test and Old Rules
Modernising crypto regulation means rethinking older laws that never imagined digital assets.
Much of today’s debate is centred around the Howey Test. The Howey test is a standard created in 1946 by the Supreme Court to determine what qualifies as an “investment contract.”
This was decades before Bitcoin was ever invented.
The SEC has used the Howey Test in enforcement cases against companies like Ripple and Coinbase, and has argued that many crypto tokens count as securities.
Critics argue that using this test on decentralized networks is not sensible, as blockchain tokens serve distinct roles. They might secure a network and grant voting power, or represent real-world assets rather than act as investment vehicles.
Atkins agreed that the 1930s-era securities acts and the 1946 Howey Test are showing their age. “Tokenisation is not about having thousands of coins,” he said. “It’s about putting things on-chain, which offers huge benefits for finance and beyond.”
He added that blockchain transparency could make compliance easier, not harder, for both companies and regulators.
