SEC Explores 1990s-Style Regulatory Pathway for Crypto Markets

SEC Chair Paul Atkins signaled a potential regulatory compromise for crypto trading systems during a May 8 speech. Drawing parallels to the 1990s electronic trading revolution, Atkins proposed a two-phase approach: initial targeted guidance for on-chain platforms, followed by formal rulemaking to define their status under securities laws.

The strategy mirrors the SEC's handling of electronic trading decades ago, when no-action letters preceded the creation of Regulation ATS in 1998. That framework allowed alternative trading systems to operate as broker-dealers during market maturation—a model now being considered for decentralized finance.

This approach marks a departure from the SEC's recent enforcement-heavy stance. By creating temporary operating space within the regulatory perimeter, the agency appears to acknowledge the unique architecture of software-based markets while maintaining investor protections.