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The head of Topwall Street Watchdog has pledged to notify businesses of technology violations before “pushing the doors.”
Paul Atkins, who was appointed chairman of the Securities and Exchange Commission by US President Donald Trump this year, told the Financial Times in an interview in Paris that the agency has begun to chase “con artists.”
“If you lie, you’ll trick or steal investors and steal their money [disgraced former financier] Bernie Madoff, we’ll leave you naked, homeless and without wheels,” Atkins said.
However, he added that there are “other gradients where you have to give people notifications.”
“You can’t come all of a sudden and knock the door down and say, ‘We’ve got you, you’re doing something, that’s a technical violation,'” he said.
Atkins is restructuring the Committee, an independent institution tasked with protecting US investors by Republican regulators adopting a more business-friendly stance, unlocking the drive for deregulation and rowing the strict enforcement program adopted by WatchDogs under Biden.
Since January, the SEC has dropped a series of cases and investigations targeting crypto platforms. Many of them have been donated to Trump’s Inaugural Fund. The president is a crypto champion, reporting revenues of around $60 million from one of his digital ventures and promoting his own $Trump memo coin on social media.
Atkins did not comment on the incident.
Donald Trump, left, along with Paul Atkins at the sworn ceremony in June ©Chip Somodevilla/Getty Images
The contrast with Atkins’ predecessor, Gary Gensler, is harsh. The former SEC chair cracked down on fraud and issued many wide range of new rules at the helm.
“I think a lot of people have correctly criticized the SEC,” Atkins said. “We weren’t based on precedent, especially recently. [or] Predictability. It will shoot first and then we’ll ask later,” he added, repeating Republican criticism that Gensler had regulated it through enforcement.
“What I’m trying to tackle is market perceptions that there was a lack of legitimate processes, a lack of notifications, and a lack of rule of law,” Atkins said.
He condemned billions of dollars fines for slapping banks and brokers for record violations.
According to Atkins, “regulators should not act” in response to the actions of the industry as a whole. The approach “deployed. Where it became official: what is your revenue, here’s your bill.”
Atkins claimed that the process “goes back to school days, and the teacher flapped the ruler onto the table and said, ‘Class, you have six months to clear this.”
Record-keeping rules vary between broker-dealers, investment advisors, and others, he added. “It’s time to codify this.”
In another sharp departure from his predecessor, the SEC Chairman aims to fulfill Trump’s promise to make the United States a “crypto capital of the world.”
Gensler claims that most of the tokens are securities and has launched a series of lawsuits against what he deemed to have attacked the “Wild West” industry with fraud. He refused to create crypto-specific rules, claiming that the securities laws were clear enough.
Atkins, the advocate of code, disagrees. He argues that most tokens are not securities, but rather they want to develop rules that allow investors to trade tokenized versions of stocks and bonds.
“We want people to not do this offshore,” he said. Many who invested in the Bahamas-based crypto exchange lost their money, but the funds in the regulated US derivatives sector have been protected and returned to their clients.
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“This is a very strong example of how a good regulatory scheme can help protect investors, but something offshore would not be right,” Atkins said.
However, crypto skeptics argue that FTX illustrates the bravery of an industry that offers little protection for investors.
Atkins said the SEC needs rules to manage “smart contracts” that promise immediate transaction settlements via Crypto, but when the committee formulated the rules it warned companies that already offer U.S. stock trading as it was “very cautious.” “If the Securities Act trades securities, the law applies.”
