President-elect Donald J. Trump picked Paul Atkins to serve as chair of the Securities and Exchange Commission, turning to a pro-business conservative and former regulator to run the agency that is in charge of protecting investors from fraud and malfeasance on Wall Street.
Mr. Trump made the announcement in a post on his Truth Social platform on Wednesday.
Mr. Atkins, 66, who was an S.E.C. commissioner under President George W. Bush, is a well-known, and generally admired, figure in Washington legal circles and the securities regulatory community. In the early 1990s he worked at the S.E.C. during both Republican and Democratic administrations.
Shortly after his term as S.E.C. commissioner ended in 2008, Mr. Atkins founded Patomak Global Partners, a financial services consulting firm. Patomak provides advisory services to banks and investment firms on regulatory and compliance matters. More recently, the firm has advised clients on issues related to crypto and digital assets.
Mr. Atkins, a lawyer, has been playing an active role in helping to draft “best practices” for crypto trading platforms as co-chair of the Token Alliance, which is part of the Digital Chamber of Commerce. His nomination will need Senate confirmation.
In tapping Mr. Atkins to serve as the nation’s top securities cop, Mr. Trump chose someone who is likely to take a lighter regulatory approach than the current S.E.C. chair, Gary Gensler. The fast-growing cryptocurrency market, in particular, has bristled against efforts to regulate it.
Mr. Trump, in his post, said “Paul is a proven leader for common sense regulations.” He added that Mr. Atkins “recognizes that digital assets & other innovations are crucial to Making America Greater than Ever Before.”
The crypto industry spent tens of millions of dollars during this year’s presidential campaign to support candidates who favor softer regulation and seek to back away from the Biden administration’s crypto crackdown, which included lawsuits and criminal charges against some of the industry’s leading figures. Mr. Trump himself is now directly involved in the industry with a new cryptocurrency venture that was unveiled in September and will be run by his two oldest sons.
Mr. Gensler’s tenure has drawn criticism from Republicans on Capitol Hill who say he has used his post to push progressive causes. His five-year term runs to June 2026, but he announced last month that he would step down on Jan. 20, when Mr. Trump is sworn into office.
The new S.E.C. chair is likely to try to roll back many of Mr. Gensler’s initiatives, among them his push to have public companies deal with issues like climate change and promote diversity.
A number of regulations enacted under Mr. Gensler are being challenged in the courts. It’s possible that the new chair will decide to simply stop litigating those cases rather than go through the time-consuming process of rescinding rules, said Tyler Gellasch, a former S.E.C. lawyer and president of Healthy Markets Association, a group that advocates greater securities regulation.
Most of the criticism from the crypto industry and legislators — including Democrats — has centered on Mr. Gensler’s decision to treat all crypto assets as regulated securities. Critics say crypto assets should be treated as either commodities or digital currencies and therefore out of the reach of the S.E.C.
During the presidential campaign, Mr. Trump promised to end the S.E.C.’s legal crackdown on crypto.
The S.E.C. is now likely to either take a hands-off approach to crypto or be selective in which crypto assets it designates as securities and therefore subject to regulation and enforcement actions. The new regulator’s go-lightly approach would probably dovetail with a renewed push in the Republican-controlled Congress to pass a law that removes most digital assets from the S.E.C.’s jurisdiction.
One of the first things the new chair will have to decide is whether to continue the high-profile enforcement action the S.E.C. filed against Coinbase, a big crypto exchange. The S.E.C. charged the company with violating securities law by failing to register as a broker and allowing unregistered crypto assets to be sold on its platform. It was one of Mr. Gensler’s signature cases.
The Coinbase case cuts to the heart of his strategy of treating virtually all crypto assets as securities. Coinbase has vehemently objected to the S.E.C.’s approach.
The new S.E.C. chair could seek to dismiss the case or find a settlement that is agreeable to Coinbase.
Dennis Kelleher, chief executive of Better Markets, a nonprofit that advocates greater Wall Street regulation, said he expected the new S.E.C. chair to dismiss not only the Coinbase lawsuit but also any other active enforcement actions the regulator filed against a crypto firm.
The position of S.E.C. chair is critical in setting policy decisions for the commission. But the chair is just one of five commission members.
However, the Democrats will have just a single commissioner on the S.E.C. after Jaime Lizárraga, a Democrat, also steps down, on Jan. 17, to spend more time with his ailing wife.
Yet for all the anger on the right that Mr. Gensler has drawn for his aggressive approach to regulating crypto, enforcement actions brought by the S.E.C. declined during the past fiscal year.
The S.E.C. reported last month that it filed 26 percent fewer enforcement actions in the fiscal year that ended on Sept. 30 compared with the year earlier.
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