Catenaa, Monday, April 20, 2026- Nearly one year after taking over the Securities and Exchange Commission, Chair Paul Atkins is reshaping US crypto regulation by moving away from the enforcement-heavy approach of his predecessor while opening the door to broader digital asset innovation.
In an interview with CNBC, Atkins said the SEC is no longer relying on “regulation through enforcement” and instead wants to make the United States a more attractive place for crypto companies to build products and operate legally.
The change marks a sharp departure from the tenure of Gary Gensler, when the SEC aggressively pursued legal action against crypto companies and argued that most digital tokens should be treated as securities.
Since taking office, Atkins has introduced “Project Crypto,” a broader effort to modernize the SEC’s treatment of digital assets. The initiative includes plans for a clearer token classification system and an innovation exemption aimed at helping new crypto products enter the market under a defined legal structure.
Many enforcement cases launched under Gensler have since been dropped, reinforcing the sense that the SEC is rewriting its relationship with the crypto industry.
While the SEC has become more open to crypto, regulators are growing increasingly concerned about the rapid rise of prediction markets.
Platforms such as Polymarket and Kalshi have expanded quickly since the 2024 election cycle, attracting users interested in trading on political outcomes, economic data and sports events.
Regulators worry that such markets could be vulnerable to insider activity, manipulation and conflicts of interest, particularly when politicians or government officials are connected to events being traded.
Atkins said these issues are “disturbing” and confirmed that the SEC is examining the sector alongside the Department of Justice and the Commodity Futures Trading Commission.
The rise of prediction markets has also created a battle between federal and state authorities.
Michael Selig has argued that the CFTC should oversee prediction markets, while some states believe certain event contracts resemble gambling and violate local laws.
Lawmakers have also introduced proposals to restrict event contracts tied to war, government policy and political decisions.
The SEC has spent years debating how digital assets should be regulated. Under Gensler, the agency focused on lawsuits and enforcement actions against crypto firms.
Atkins is now trying to replace that model with clearer rules, hoping to bring more crypto businesses back to the United States instead of pushing them overseas.
At the same time, the rise of prediction markets is forcing regulators to decide whether these platforms should be treated as financial products, gambling products or something in between.
