SEC Chair: No Panic Over Crypto Price Drops, Focus on Rules

In his remarks alongside Commissioner Hester Peirce, SEC Chair Paul Atkins directly addressed the market’s recent slide, which saw Bitcoin (BTC) trading near $66,000, Ethereum (ETH) fall below $2,000, and Ripple’s XRP drop nearly 5%. Despite this pressure and bearish forecasts like Bloomberg Intelligence strategist Mike McGlone’s $10,000 Bitcoin prediction, Atkins was unequivocal. “It is not the regulator’s job to worry about the daily swings of the markets,” he stated, adding that those focused solely on rising numbers “are likely to be disappointed.” This stance marks a significant philosophical shift, explicitly decoupling regulatory action from short-term market sentiment and volatility.

This approach reflects a broader strategic change at the SEC. Atkins noted the agency has already dropped numerous crypto cases and ended what critics labeled “regulation by enforcement.” It has also issued staff guidance on areas like mining, staking, and meme coins. The message is clear: the SEC’s focus is transitioning from reactive litigation to proactive framework development, aiming to provide the industry with clearer rules of the road rather than navigating through enforcement actions.

The centerpiece of this new direction is “Project Crypto,” a joint initiative with the Commodity Futures Trading Commission (CFTC). Atkins used the platform to detail a concrete regulatory agenda designed to outlast market cycles. The project’s key pillars include developing a coherent framework for crypto asset classification—a perennial source of uncertainty—and crafting specific rules for trading tokenized securities on automated market makers (AMMs). Furthermore, the SEC plans to issue guidance on custody requirements for non-security assets, a category that notably includes stablecoins.

This structured agenda directly addresses some of the most persistent gaps in the U.S. regulatory landscape for digital assets. By tackling classification, trading mechanics, and custody simultaneously with the CFTC, the SEC aims to create a more integrated and predictable environment. The focus on tokenized securities, in particular, suggests regulators are preparing for a future where traditional financial instruments are increasingly represented and traded on blockchain networks.

Perhaps the most forward-looking announcement was the plan for an “innovation exemption.” This temporary measure would allow for limited, volume-capped trading of tokenized securities on decentralized platforms. Designed as a sandbox, the exemption aims to let market participants experiment and gather data while the SEC develops permanent, formal rules. “Come in and talk to us,” Atkins encouraged developers, positioning the SEC not as a barrier but as a potential collaborator in responsible innovation.

Commissioner Hester Peirce complemented this view, framing the current market downturn as an opportunity. Noting the “Schadenfreude” some critics feel toward crypto’s struggles, she argued that regulatory clarity alone is insufficient. “You have to build stuff that people want and need,” Peirce stated, asserting that creating real utility is “the best way to garner support” politically. Atkins echoed this sentiment, urging the audience to “put your nose to the grindstone and work to build things that matter.” He framed this builder-centric ethos as the path to transforming “Schadenfreude to Freudenfreude—the sense of happiness we feel when others succeed.”

The combined message from the SEC leadership is a nuanced one: regulatory patience during market stress, coupled with a concrete plan for future rules and an invitation to innovate within guardrails. By focusing on structural rulemaking through Project Crypto and offering a temporary innovation exemption, the agency is attempting to steer the industry toward long-term development, irrespective of whether Bitcoin tests the $60,000 support level or not.