SEC Chairman Paul Atkins calls for the "rationalization" of encryption regulation, opposing enforcement regulation.

Gate News bot message, SEC Chairman Paul Atkins testified before the Senate Appropriations Committee's Financial Services and General Government Subcommittee on Tuesday, vowing to establish a "reasonable regulatory framework" for digital assets, placing rule-making and transparency above enforcement actions. He is continuing efforts to bring a "new day" to the SEC and change the agency's stance on digital assets.

He stated: "Clear rules are essential for protecting investors from fraud, especially in helping them identify scams that do not comply with legal regulations." Atkins added: "Policy-making will be accomplished through notice and comment rule-making, rather than through enforcement regulation."

Since Gary Gensler's resignation, the SEC has withdrawn several high-profile lawsuits, first under the leadership of interim chairman Mark Uyeda, and then under the leadership of Atkins, issuing guidance on various categories of encryption, including excluding certain staking activities from securities regulation.

The agency's stance is changing, and at the same time, calls in Congress for a complete removal of the SEC's jurisdiction over digital assets are growing louder.

Last week, lawmakers introduced the CLARITY Act (, which will amend the securities laws to exempt most digital assets from SEC jurisdiction and establish a new legal framework.

The Chairman of the House Financial Services Subcommittee, Republican Congressman Bryan Steil, stated at the time: "Our bill reinforces America's leadership, achieves the democratization of digital assets, unleashes innovation, and protects consumers from fraud."

Democratic staff of the House Financial Services Committee criticized the SEC for not conducting an impact analysis on the bill and expressed concerns that the proposal might use blockchain applications as a guise to create loopholes for traditional finance.

Atkins acknowledged that the legislative landscape is changing, but he emphasized the role of the newly established SEC cryptocurrency special working group and the upcoming DeFi roundtable in supporting innovation.

He stated: "I expect this market innovation to bring benefits in terms of efficiency improvements, cost reductions, enhanced transparency, and risk mitigation."

Source: Decrypt