Steady but Strict: Why the SEC Won’t Ease Crypto Enforcement Under the Current Market Structure

In the era of digital assets, the regulatory environment is gradually shifting from a “marginal gray area” to a “structured rule domain.” Recently, SEC Chairman Paul S. Atkins emphasized in a public speech that under the current market structure, the SEC will not adopt a lenient or permissive enforcement attitude towards Crypto Assets. This sends an important signal to the industry: regulatory upgrades are inevitable, but it does not mean a complete abandonment of innovation.

Transformation of the Crypto Assets Market Model: New Signals of Regulation Emerge

In the past, there was a lot of uncertainty between the categories of Crypto Assets, issuance methods, and trading platforms. Many projects have been troubled by whether their tokens are considered securities. Atkins pointed out in his speech: “If you are tired of hearing the question ‘Are Crypto Assets securities?’, I deeply sympathize.”

He further proposed views on token classification and the termination of investment contracts, aiming to break the deadlock of “once a token is issued, it is always a security.” At the same time, he emphasized: “I am not committing to a lenient approach towards Crypto Assets.” This sentence is precisely at the core of this commitment.

What is the true meaning of “not loosening law enforcement”?

The phrase “will not relax enforcement” should be understood from three dimensions:

• The enforcement力度 will not decrease due to innovation. Even though regulatory thinking is evolving, there is still a firm stance against illegal activities such as fraud, insider trading, and illegal financing. Atkins clearly stated: “Fraud is fraud.”
• Regulatory thresholds may be clearer but not more lenient. Token classification systems, issuance exemption mechanisms, and other measures provide pathways for compliant parties, but this does not mean “exempt from regulation.” Any token that is or has been classified as an investment contract may still be regarded as a security in terms of its issuance and trading.
• Emphasize the regulatory stability under the existing market structure framework. Atkins has repeatedly mentioned supporting Congress in passing legislation related to the Crypto Assets market structure. This indicates that regulation is not changed arbitrarily, but is built upon institutional frameworks and laws.

Three Major Recommendations for Project Parties, Exchanges, and Investors

Suggestion 1 (Project Party) - Enhance Regulatory Adaptability

The project team should clearly define the functions of the token, the degree of decentralization, and whether there is an expectation of investment returns as early as possible, and based on this, determine whether it may be considered a security. At the same time, compliance disclosure documents, audit reports, governance structures, etc., should be prepared to enhance compliance credibility.

Suggestion 2 (Exchange/Platform) - Focus on the Compliance System for Trading

The platform needs to verify whether the tokens launched may be regarded as securities by regulators, and assess whether the trading, custody, and clearing mechanisms comply with regulatory requirements. At the same time, attention should be paid to changes in the regulatory classification mechanism, and caution should be exercised when expanding the product range.

Suggestion Three (Investors) - Make rational choices and pay attention to regulatory risks.

Investors should be aware that regulation will not relax due to innovation. Whether a token has the characteristics of an investment contract and whether it is governed by securities law are important risk dimensions. Paying attention to the legitimacy of the project, the issuance structure, and the team’s commitment is a crucial step in reducing the risk of failure.

Future Trends: Clear Regulation vs. Accelerated Innovation

Looking ahead, we may see the following trends:

• Regulatory rules are becoming increasingly clear: The classification system and issuance exemption mechanism proposed by Atkins indicate that Crypto Assets are entering an era of “legality.”
• Innovative activities are becoming more structured: innovative enterprises will shift more from “regulatory evasion” to “compliance innovation,” exploring functional tokens, decentralized autonomous organization (DAO) models, and network infrastructure projects.
• Market structure reconstruction: As legislation progresses and regulatory frameworks take shape, exchanges, custodians, and issuance platforms will redistribute roles, and market participants need to seize the opportunities brought by structural adjustments.

Conclusion

The message conveyed by the SEC chairman in his speech is very clear: it is not about relaxing regulations, but rather about establishing a clear, predictable, yet firm enforcement environment for the encryption sector. For the industry, this is both a challenge and an opportunity. The stronger the compliance, the clearer the rules, the more direction innovation will have. In the future, those who can find a balance between “clear rules” and “innovation release” may seize the initiative in the new era of Crypto Assets.