John Deaton Urges SEC Overhaul Under Paul Atkins to Reform Crypto Regulations

• John Deaton calls for dismantling the SEC’s crypto unit and replacing it with a unified fraud unit under Paul Atkins’ leadership.
• Deaton emphasizes excluding DeFi and self-custody from SEC oversight, arguing these areas fall outside its regulatory scope.
• Donald Trump and Paul Grewal highlight Atkins’ potential to foster innovation and restore balance in the SEC’s approach to crypto.

Paul Atkins, the incoming Chair of the U.S. Securities and Exchange Commission (SEC), is facing mounting pressure to reform crypto regulations. Prominent lawyer John Deaton has outlined four reforms he believes are critical for Atkins to implement immediately. Deaton’s proposals aim to address long-standing concerns about transparency and leadership within the SEC, particularly regarding its approach to digital assets.

Deaton Demands SEC Leadership Overhaul

Deaton has urged Atkins to dismiss officials tied to controversies under outgoing SEC Chair Gary Gensler. Specifically, he called for the removal of individuals involved in the Debt Box case, labeling their actions as damaging to the SEC’s credibility. He also suggested demoting or firing leadership figures appointed during Gensler’s tenure, emphasizing the need for fresh leadership aligned with Atkins’ vision.

Deaton stated that Atkins must establish his authority by selecting leaders who can implement his regulatory goals effectively. This, he noted, includes dismantling the SEC’s existing crypto unit, which he views as unnecessary. Instead, Deaton advocates for a unified fraud unit capable of addressing all fraud cases without creating specialized divisions.

Clear Boundaries for Crypto and DeFi Regulation

In addition to leadership reforms, Deaton stressed the importance of clarifying the SEC’s jurisdiction over decentralized finance (DeFi) and self-custody of digital assets. He believes these areas should fall outside the SEC’s purview, arguing that overregulation stifles innovation in the crypto space. By explicitly defining these boundaries, Atkins could signal a more balanced regulatory approach.

Notably, this perspective aligns with comments from Donald Trump, who praised Atkins’, highlighting his commitment to fostering innovative capital markets. Trump described Atkins as a leader who understands the critical role of digital assets in enhancing the U.S. economy.

Crypto Industry Voices Support for Atkins

Paul Grewal, Coinbase’s Chief Legal Officer, echoed support for Atkins’ leadership. Grewal expressed optimism about Atkins’ ability to restore balance to the SEC’s regulatory framework. He noted the urgency for change, emphasizing that Atkins’ leadership is anticipated to bring much-needed reform to the agency.