SEC Chairman Paul Atkins States Crypto Regulation Work Is Not Finished
Atkins: More crypto regulation proposals are coming
On October 1, U.S. Securities and Exchange Commission Chairman Paul Atkins stated that the work on crypto regulation is not finished, and more proposals are on the way, aimed at assisting President Donald Trump in making the U.S. a hub for crypto capital.
On the same day, the Commission proposed a new framework for crypto custody, covering registered investment advisors, investment companies, and business development companies, providing clients with a compliance path for holding crypto assets that previously did not exist. The proposal allows for some self-custody and permits state trust companies to act as custodians, while also revising decades-old rules regarding advisors and regulated fund custody, clarifying record-keeping and audit requirements.
Atkins noted that since the emergence of Bitcoin in 2008, crypto has grown from a niche category to a multi-trillion-dollar market, and the old rules have not kept pace, making it difficult for advisors to comply when offering crypto-related investments. The proposal will be open for public comment for 60 days after publication in the Federal Register and is not yet finalized.
This proposal follows the Senate's shelving of the Clarity Act in September. The Commission is using existing authority to advance: in December 2025, staff will issue a no-action letter regarding the tokenization pilot for custodial trust companies, in January 2026, a classification for tokenized securities will be provided, and in August, Regulation Crypto Assets was proposed to create a separate issuance system for certain investment contracts involving crypto assets, with a recent push for an innovation exemption to create a limited trading channel for tokenized national market system stocks.
The custody rules aim to address who can hold assets and how advisors can allocate crypto for clients. The crypto task force was previously led by Commissioner Hester Peirce, who has been with the Commission for eight years and issued her resignation statement on October 1. The Commodity Futures Trading Commission is also working separately to supplement market structure following the stagnation of congressional legislation.
This is a supply of rules, not a one-day buying spree. The allocators are advisors and funds looking to enter crypto, while the compliant channels for selling are state trusts and custodial banks that can enter the qualified custodian list, with self-custody provisions leaving some assets on the advisor's side. After the Clarity Act was stalled, funds will not wait for legislation but will flow to existing federal paths for custody and tokenization pilots. Beneficiaries include licensed custodians in the U.S. and issuers that can access fund channels, while those relying on regulatory gray areas in offshore trading venues are under pressure.
Atkins defines this series of actions as ending the replacement of rules with enforcement. The list of subsequent proposals has not yet been announced.
Source: Public information
ABAB AI Insight
Since taking office, Paul Atkins has shifted the SEC away from the enforcement path of Gary Gensler's era. During Gensler's tenure, the Howey test was used against Coinbase, Binance, and staking products, and the spot Bitcoin ETF was only approved after being forced through the courts. Atkins' sequence this year has been to first halt enforcement replacing rules, then provide custodial trust companies with tokenization pilots, token classifications, issuance systems, and custody rules, with Peirce's crypto task force being the foundation for this writing, and proposals still reflecting this on her resignation day.
Money is not going into the Commission; it is flowing into custody and fund channels. The custodial vacuum under the advisor law previously kept registered advisors outside of direct crypto holdings, forcing clients to go through ETFs or offshore. The new framework incorporates state trusts and some self-custody into qualified holdings, effectively bringing state or federal trusts like Anchorage, as well as institutional custodians like Coinbase and BitGo, into the subscription chain of investment companies and business development companies. The motivation is that after the Clarity Act stalled in the Senate, administrative rules can still determine who can collect management fees.
In contrast, the custodial guidelines from 2019 to 2021 narrowed the definition of "qualified custodians," allowing banks and trusts to capture institutional flows, while exchange custody remained in a gray area. Now, the list is being expanded. The industry's position is to fill the regulatory gap during the legislative hiatus: issuance, trading exemptions, and custody are being advanced in three separate tables, while the market structure law itself remains stalled.
Structurally, this is a redefinition of access in regulatory changes. The bottleneck for crypto assets entering advisor portfolios is not price, but who can legally hold them on the books. The threshold has changed from "almost no path" to "state trusts plus limited self-custody," shifting pricing power from offshore platforms back to U.S. fund channels. The mechanism is that proposals cannot be finalized until after a 60-day comment period, so announcing more proposals is a way to lock expectations with regulatory pathways, rather than changing positions on the same day.
ABAB News · Cognitive Law
When legislation is stalled, rules are still being issued.
Whether assets can be purchased depends first on who is allowed to hold them.
After enforcement exits, the access list becomes the new barrier.