At a crypto industry conference in Washington this month, no speaker received a warmer reception than Paul Atkins, the chairman of the Securities and Exchange Commission.
Mr. Atkins was “so kind and generous,” the founder of a crypto trade group declared to the packed auditorium. He had done an “amazing job” working under President Trump, she added, before welcoming him to the stage to fervent applause.
When he addressed the room, Mr. Atkins, 68, delivered some good news for his industry hosts. At that very moment, he told them, the S.E.C. was issuing a set of business-friendly guidance for crypto companies.
“You should find that in your inbox,” Mr. Atkins said.
Sure enough, the link promptly arrived, flashing onto phone screens in the crowd. It was a 68-page document laying out policies that would insulate cryptocurrencies from certain regulatory rules, giving the industry much of what it has demanded for years.
The S.E.C.’s sweeping embrace of crypto, an industry with a long history of fraud and market turmoil, has entered a new stage. After dropping a series of enforcement lawsuits last year, the nation’s top financial regulator is now issuing guidance that could open the door for more crypto products and give the industry more flexibility as it lobbies Congress to pass legislation.
At the same time, the Commodity Futures Trading Commission, another top financial regulator, has embraced digital currencies and enthusiastically promoted prediction markets, the crypto-powered betting sites where traders gamble on everything from federal elections to the Oscars.
In recent months, Mr. Atkins and Mike Selig, 36, his counterpart at the C.F.T.C., have appeared at a succession of crypto industry events, from Wyoming to New York to Washington to President Trump’s private Mar-a-Lago club, with at least two more stops scheduled this year in Miami and Las Vegas. They have echoed the industry’s talking points, pledged to work together to support its growth and proposed policies that the industry favors.
The apparent coziness has raised eyebrows in Washington, where consumer protection advocates have questioned the optics of U.S. regulators rubbing shoulders with crypto industry leaders.
Top financial regulators are “prioritizing the crypto industry’s interests above literally everything,” said Dennis Kelleher, who runs Better Markets, a financial reform group. “The signal to the industry is whatever you want, you’re going to get.”
The reversal has been driven by Mr. Trump. A onetime crypto skeptic, he changed his views during the 2024 campaign, as the industry poured money into congressional elections and he and his sons started their own crypto venture. Mr. Trump and other industry supporters argued that crypto firms were unfairly targeted by Biden-era regulators who relied on outdated laws that don’t apply to the new age of financial technology.
Mr. Atkins’s conference appearances amount to a kind of “apology tour,” said Austin Campbell, the founder of a crypto consulting firm. “The reason you’re seeing this degree of outreach and sympathy and kindness toward the industry is previously they were treated extremely unfairly.”
Mr. Atkins has also attended non-crypto events this year, including one held by a securities industry group. An S.E.C. spokesman said it was “standard practice” for Mr. Atkins to participate in a range of events.
“Detailing policy goals relevant to a particular audience is common procedure and common sense,” he said.
Brooke Nethercott, a C.F.T.C. spokeswoman, said Mr. Selig has attended conferences and hosted meetings with many industries, from traditional finance to agriculture.
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“The C.F.T.C. has ended the prior administration’s campaign of regulation by enforcement, which drove American innovators and job makers offshore, and is developing clear rules of the road for novel products and platforms,” she said.
During the Biden administration, the crypto enforcement campaign was led by Gary Gensler, a former Goldman Sachs partner who headed the S.E.C. He argued that most digital currencies were securities, meaning they should follow the same strict rules that apply to stocks and bonds.
Mr. Gensler filed lawsuits against leading crypto exchanges like Coinbase and Kraken, and spoke frequently about the dangers of crypto fraud. But virtually the moment that Mr. Trump was inaugurated last year, Mr. Gensler’s campaign was unwound.
The S.E.C. dropped the cases against Coinbase, Kraken and other firms. This month, the agency settled a lawsuit against Justin Sun, a crypto entrepreneur and Trump family business partner whom the agency had sued for fraud.
Mr. Atkins has a history in crypto. Before becoming S.E.C. chair, he consulted on crypto issues and worked closely with the Digital Chamber, a crypto trade group that organized the conference in Washington.
Onstage at the conference this month, Perianne Boring, the Digital Chamber’s founder, said she met Mr. Atkins eight years ago and asked him for help navigating Washington.
“He was so kind and generous, and said he would, without really knowing a whole lot about who we are in terms of the industry and what digital assets are all about,” Ms. Boring said.
Now Mr. Atkins is in a position to reshape the industry for years to come.
Under the guidance he laid out at the conference, many major cryptocurrencies would not be classified as securities, exempting them from certain disclosure requirements. Other popular crypto products and services, with wonky names like “digital collectibles,” “wrapped tokens,” “airdrops” and “liquid staking,” would also be largely insulated from securities laws, experts who reviewed the guidance said.
“Kind of wild crypto got everything it wanted,” Michael Ippolito, a crypto executive, said on X.
The S.E.C.’s guidance amounts to an interpretation of existing statutes, and does not carry the force of law. It could be altered after a public comment period or reversed by a future administration.
But many principles outlined in the guidance align with industry-backed legislation that has been pending for months in Congress. A dispute with the banking lobby has delayed that bill, leaving its future uncertain.
For now, though, the industry has license to operate more freely. Shortly after Mr. Atkins unveiled the guidance, Chiliz, a crypto company that offers soccer-themed “fan tokens” overseas, declared that its products were on “firm legal ground in the United States.”
Mr. Atkins issued the guidance jointly with the C.F.T.C.’s Mr. Selig, who also appeared at the Digital Chamber conference.
The policies would give the C.F.T.C. authority over many aspects of the crypto world, a shift in oversight that has raised alarm among some former regulators and consumer protection advocates. The C.F.T.C. is smaller than the S.E.C., with a history of less aggressive enforcement.
Since taking over the agency in December, Mr. Selig has been an outspoken advocate for crypto as well as prediction markets like Kalshi and Polymarket, which have surged in popularity.
Prediction markets are regulated by the C.F.T.C., though state authorities have battled the companies in court, arguing that they should be required to follow state gambling laws.
In February, Mr. Selig intervened in court on the side of the prediction markets, filing a brief saying that states should not regulate them. He has called for the “minimum effective dose of regulation” and trumpeted prediction market odds as an alternative to traditional media.
“The markets are truth machines,” Mr. Selig said at a crypto conference in New York this month. “It’s really important that we protect these markets here in the U.S.”
Georgia Gee contributed research.
David Yaffe-Bellany writes about the crypto industry for The Times from New York. He can be reached at [email protected].
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