SEC Aims to End Crypto Exile With Pro-Innovation Move
The U.S. Securities and Exchange Commission (SEC) is preparing to introduce a long-awaited “innovation exemption” that could reshape how companies build on digital assets and emerging technologies in the United States.
SEC Chair Paul Atkins said the initiative remains a top priority and could be formalized as soon as the end of the quarter, despite delays caused by the ongoing government shutdown.
Speaking at a Futures and Derivatives Law Report event hosted by Katten Muchin Rosenman LLP in New York, Atkins reaffirmed that digital assets remain central to the agency’s agenda. “As you know, we’ve had four years, at least, of repression of that industry,” he said. “The result was pushing things abroad, rather than having innovation being done here.”
SEC’s Shift Toward a Pro-Innovation Framework
Atkins emphasized that the proposed exemption is part of the SEC’s broader shift toward fostering innovation instead of relying on enforcement actions.
Paul Atkins speaking at Futures and Derivatives Law Report event (Source: CoinDesk)
“That’s one of the top priorities,” he told reporters after the event. “I want to be welcoming to innovators and have them feel like they can do something here in the United States, so that they don’t have to flee to some foreign jurisdiction.”
The SEC plans to initiate formal rulemaking for the exemption by the end of 2025 or early 2026, depending on when the government resumes full operations. Atkins expressed confidence that the agency could meet this timeline once the shutdown ends.
If implemented, the innovation exemption would mark a major departure from the SEC’s “regulation-by-enforcement” approach that has defined much of the agency’s relationship with the crypto sector over the past several years.
Legislative Progress and the GENIUS Act
During his remarks, Atkins praised Congress for advancing digital asset legislation — particularly the GENIUS Act, the first major crypto-focused law in the U.S. that establishes a regulatory framework for stablecoins.
“Market structure is an issue there on the bill, and so we’ll see where that goes,” he said, expressing optimism about ongoing efforts in Washington.
Other speakers at the event offered more cautious views. Summer Mersinger, CEO of the Blockchain Association and former CFTC commissioner, estimated that the market structure bill has only a 51% chance of passing this year.
Meanwhile, Multicoin Capital’s Greg Xethalis and CoinFund’s Chris Perkins both highlighted the difficulty of securing broad legislative consensus before 2025 ends.
Stablecoins and the Future of U.S. Crypto Regulation
Panelists also discussed the GENIUS Act’s early impact on stablecoins. Regulators at the Treasury Department have already begun publishing proposed rules for the sector, which Xethalis described as the “plumbing” that will enable real-world adoption.
“Now that we have the rules at Treasury being written, we’re going to see a Cambrian explosion of people actually starting to utilize this stuff on a day-to-day basis,” he said, citing Visa’s integration of USDC as a prime example of mainstream stablecoin use.
Mersinger added that stablecoins could soon play a growing role in fund transfers and other financial contracts, helping to modernize the broader U.S. financial infrastructure.
The Road Ahead
Despite the obstacles presented by the shutdown, Atkins maintained that the SEC is intent on completing its innovation exemption rulemaking by early 2026. The move signals a growing recognition in Washington that U.S. regulatory uncertainty has driven innovation offshore — and that it’s time to reverse that trend.
If successful, the exemption could become one of the most significant regulatory milestones for the crypto industry since the passage of the GENIUS Act, reshaping the United States’ stance toward blockchain innovation.
