1. Trump Pick Atkins Sworn In To Lead SEC
On April 21, 2025, Paul Atkins was sworn into office to be the next Chair of the SEC after a 52-44 vote by the Senate. Atkins, a previous SEC Commissioner, rejoins the Commission at a pivotal time for the future of digital markets. As Chair, he will be working alongside fellow crypto advocates, SEC Commissioners Mark Uyeda and Hester Peirce. The crypto industry widely celebrated Atkins’ confirmation and crypto markets reacted favorably, with Bitcoin eclipsing $100,000 only weeks after his confirmation.
During his confirmation hearing, Chairman Atkins testified that his goals included: “[T]o protect investors from fraud, to keep politics out of how our securities laws and regulations are applied, and to advance clear rules of the road that encourage investment in our economy to the benefit of all Americans.” Since then, Atkins has taken quick action to promote innovation across the SEC, such as by (i) directing staff to draft rule proposals relating to crypto; (ii) integrating the SEC’s Strategic Hub for Innovation and Financial Technology (FinHub) throughout the agency; (iii) encouraging the SEC to reconsider its position that closed-end funds investing 15% or more of their assets in private funds should have a minimum initial investment requirement and be available only to accredited investors; and (iv) instructing SEC staff to undertake a comprehensive review of the Consolidated Audit Trail.
2. SEC Won’t Revisit Off-Channel Communications Settlements With 16 Financial Services Firms
Between the span of December 2021 and October 2024, the SEC conducted enforcement “sweeps” across the financial services and banking industry relating to the unapproved use of off-channel communications, business communications on employees’ personal devices, and SEC recordkeeping obligations. These sweeps resulted in settlements with over 100 firms and penalties of approximately $2 billion. Sixteen firms, which previously reached settlements with the SEC and agreed to undertake certain remediation efforts, submitted a motion to the Commission seeking to modify their settlement orders to align more closely with the agreements signed by other firms that settled with the SEC more recently which involved less burdensome remediation efforts. The sixteen firms requested a number of modifications, including: (i) replacing a two-year independent compliance review with a one-time internal audit; (ii) eliminating the requirement to report employee discipline related to off-channel communications; and (iii) removing the obligation to file a FINRA Membership Continuation Application and submit to six years of heightened supervision.
On April 14, 2025, the SEC denied the motion to modify or amend the settlements. The SEC was not persuaded by the firms’ claims that they were being penalized for settling earlier than other firms. The SEC further explained, “the decision to settle early carries both an inherent risk and potential benefit: Though the settling party must act with relatively less information than those that settle later, it avoids the time and expense of further negotiation and litigation. Settlor’s remorse—and a desire to revisit that risk calculus—does not justify upsetting a final, agreed-upon settled order.” In response, FINRA announced that it would work to modify the heightened supervision plans applicable to all firms that signed settlement agreements prior to January 2025.
3. SEC Clarifies Reserve-Backed Stablecoins Are Not Securities
On April 4, 2025, the SEC’s Division of Corporate Finance issued a statement on the application of federal securities laws to certain crypto assets, namely focusing on reserve-backed dollar “stablecoins.” The statement declared that the offer and sale of reserve-backed dollar stablecoins do not qualify as securities transactions.
Reserve-backed stablecoins are designed to maintain a stable value relative to the U.S. dollar by holding at least enough low-risk assets in reserve to fully exchange all tokens for dollars at any time. The issuers of such tokens often promote the tokens for their stable value, but clarify that the purchase of the token does not confer ownership, or entitle a purchaser to interest, returns, or financial benefit. Unlike notes that are purchased as an investment or with the expectation of certain returns, or investments made with the expectation of profit derived from the efforts of others, the SEC opined that stablecoins are “digital dollars” with a consumer-oriented use. As such, the SEC concluded that stablecoins do not meet the legal definition of a security under existing federal law.
The statement came amidst legislative efforts in both chambers of Congress to regulate reserve-backed stablecoins. In June 2025, the Senate passed the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act) of 2025 (S. 1582), which outlines a framework of federal and state regulations for stablecoins. The GENIUS Act explicitly defines “payment stablecoin” to exclude securities as defined by U.S. securities laws. It proposes amendments to the Investment Advisers Act of 1940, Investment Company Act of 1940, Securities Act of 1933, Securities Exchange Act of 1934, Securities Investor Protection Act of 1970, and Commodity Exchange Act to ensure that payment stablecoins will not be treated as securities or commodities, and that payment stablecoin issuers will not be treated as investment companies.
In April 2025, the House Financial Services Committee passed the Stablecoin Transparency and Accountability for a Better Ledger Economy Act (STABLE Act) of 2025 (H.R. 2392), establishing similar oversight standards for stablecoin issuers. Both bills are currently awaiting further consideration in the House of Representatives.
