SEC Shifts to Softer Approach on Crypto Enforcement, Plans Pre-Action Notices for Technical Violations

The U.S. Securities and Exchange Commission (SEC) will now issue crypto businesses notices of technical violations before taking enforcement action, marking a departure from its previously aggressive stance under the Biden administration. SEC Chair Paul Atkins, appointed by former President Trump, emphasized a more measured approach during an interview with the Financial Times in Paris.

Atkins criticized the SEC's past tendency to impose heavy fines for minor infractions, such as record-keeping violations, without prior warning. "That's not how a regulator should have acted," he stated, acknowledging public backlash against the agency's methods. The new policy aims to provide firms with an opportunity to rectify compliance issues before facing penalties.

This shift reflects broader efforts by Republican-appointed regulators to recalibrate enforcement strategies. While the SEC will continue pursuing fraudulent actors, Atkins highlighted the importance of due process and predictability in regulatory oversight. The MOVE could signal reduced legal risks for crypto exchanges and projects navigating complex compliance landscapes.