A new chapter is opening for crypto in the US. New SEC chair Paul Atkins announced plans to replace the outdated regulation by enforcement approach with a notice and comment process, in which proposed rules will be shared publicly to allow industry feedback before they are finalized.
Paul Atkins: no more regulation by enforcement for crypto
The new SEC policy roadmap for public consultation contrasts sharply with the enforcement-focused methods used during Gary Gensler’s tenure. The change is designed to enhance transparency and predictability in crypto regulation while fostering a more crypto-friendly environment.
In his “Testimony Before the US Senate Appropriations Subcommittee on Financial Services and General Government”, Atkins said that the key priority of his tenure “will be to develop a rational regulatory framework for crypto asset markets that establishes clear rules of the road for the issuance, custody, and trading of crypto assets while continuing to discourage bad actors from violating the law,” adding that “policymaking will be done through notice and comment rulemaking not through regulation-by-enforcement.”
What exactly is SEC’s notice and comment and how does it work?
The notice and comment process isn’t just a casual industry feedback loop – it’s a formal regulatory pathway defined by the Administrative Procedure Act. Under this process, the agency must publish proposed rules in the Federal Register, invite public feedback, and respond to major concerns before finalizing new regulations. Although it can take several months or longer, this approach is generally regarded as more democratic, consistent, and effective than regulation by enforcement.
Under the APA’s Section 553 https://www.law.cornell.edu/uscode/text/5/553 , the SEC must:
1. Publish a proposed rule in the Federal Register, outlining the regulatory text and rationale.
2. Open a public comment period – typically 30–60 days – for market participants, academics, and the public to submit feedback.
3. Review and respond to significant comments, adjusting the proposal where warranted.
4. Issue a final rule with a reasoned explanation of changes.
Notice and comment-related timelines for the US crypto sector
Industry observers expect the SEC to apply notice and comment process to key areas such as exchange-traded funds (ETFs), decentralized finance (DeFi), and stablecoins. Currently, more than 60 ETF applications are pending review. Industry experts expect formal decisions in late 2025 or early 2026.
Guidance for DeFi is also expected this year, with proposed amendments to Rule 3b-16, expanding the definition of “exchange” to include DeFi platforms, currently under review. A dedicated Crypto Rulemaking Task Force, launched in January, is soliciting comments and aims to issue draft guidance by the end of 2025.
As regards stablecoins, coordination with the Treasury and Federal Reserve could extend the timeline, but draft guidance may surface by early 2026.
Lawmakers demand greater transparency
Both Democrats and Republicans have pressed the SEC to abandon opaque enforcement in favor of clear rulemaking. In recent hearings, members of the Financial Services Committee criticized enforcement actions and urged the agency to embrace the public consultation approach. Sponsors of stablecoin and crypto-market bills have warned they will legislate if the SEC fails to deliver meaningful notice and comment guidance.
On the other hand, a successful crypto regulation shift via notice and comment could provide the legal certainty digital-asset companies have long sought. It would also reset crypto markets – in and beyond the US – on a more transparent course, simultaneously contributing to long-term growth for Bitcoin and other cryptocurrencies.
