SEC Chair Paul Atkins Confirms Crypto Innovation Exemption by Year-End

Highlights:

• SEC Chair Paul Atkins plans to finalize a crypto innovation exemption by the end of 2025.
• The innovation exemption aims to keep developers and startups working in the United States.
• Clear rules and the SEC innovation exemption could boost crypto adoption and attract global talent.

U.S. Securities and Exchange Commission (SEC) Chair Paul Atkins confirmed the agency plans to finalize an innovation exemption by the end of 2025 or early 2026. He announced the plan during the Futures and Derivatives Law Report event hosted by Katten Muchin Rosenman LLP on October 7 in New York.

🚨 JUST IN: U.S. SEC CHAIR PAUL ATKINS SAYS THE AGENCY WILL BEGIN FORMAL RULEMAKING FOR AN “INNOVATION EXEMPTION” BY LATE 2025 OR EARLY 2026, AIMED AT BOOSTING DIGITAL ASSET AND TECH DEVELOPMENT IN THE U.S. HE ADDED THAT DESPITE SHUTDOWN DELAYS, THE PLAN REMAINS A TOP SEC… pic.twitter.com/CpvXW8EQVj

— Coinwaft (@coinwaft) October 8, 2025

Atkins said the exemption aims to give crypto and fintech projects a clear path to operate under supervision, according to CoinDesk. He emphasized that despite the ongoing government shutdown, the SEC remains committed to advancing this initiative.

He noted that the previous SEC administration relied heavily on enforcement actions instead of clear rules, pushing many innovators overseas. “We’ve had four years of repression in that industry, and it pushed innovation abroad, rather than keeping it here,” Atkins said.

The Chair added that the innovation exemption would provide legal certainty for companies building blockchain-based services in the U.S. He also stressed that the measure does not remove oversight but balances investor protection with technological progress.

Atkins has advocated for the exemption since June. He directed SEC staff to explore conditional relief frameworks allowing projects to operate under supervised conditions. He expressed confidence that the agency will finalize the exemption despite current delays.

SEC’s Innovation Exemption Aims to Curb Crypto Brain Drain

Atkins pointed out that ambiguity or rigid regulations pushed several of the brightest developers and startups into moving abroad. The innovation exemption attempts to overturn this trend and maintain innovation in the U.S.

The framework would enable entrepreneurs to implement digital asset services in the country. Developers could test new technologies without fearing sudden regulatory action. Atkins stated, “I want to be welcoming to innovators and have them feel like they can do something here in the United States.”

The exemption would provide a structured window for experimentation. It allows startups to innovate while complying with U.S. regulations. The SEC Chair has stressed that the objective is to bring and keep innovators, so that the U.S. does not lose competitiveness in the global cryptocurrency sector.

Atkins also stated that the SEC intends to initiate the rulemaking of the exemption by the end of the year. The measure will potentially stop the brain drain of developers and startups moving to other countries to seek more straightforward rules once in place.

The innovation exemption will provide a stable digital asset infrastructure platform. Businesses can now roll out blockchain-based services within their countries rather than relocating abroad. The strategy would strike a balance between innovation and the protection of investors.

Congress Works on Broader Digital Asset Rules

Atkins has credited Congress with the digital asset policies. He referred to the GENIUS Act as a move to a holistic crypto framework. The Chair said coordination between the SEC and Congress will help companies understand rules clearly. It also reduces confusion and prevents overlapping requirements that previously hindered startups.

SEC CHAIRMAN PAUL ATKINS URGES CONGRESS TO PASS GENIUS ACT FOR CRYPTO REFORM

SEC Chairman Paul Atkins called on Congress to pass the Genius Act, which includes crypto market structure reforms aimed at providing clear regulatory rules. The proposal would establish joint SEC and… pic.twitter.com/s0I9vqNmTc

— Crypto Town Hall (@Crypto_TownHall) September 24, 2025

Summer Mersinger, CEO of the Blockchain Association and former CFTC commissioner, said Congress has a 50% chance to pass a broader market structure bill before 2025 ends. She noted that political and legislative challenges remain. Atkins emphasized that the innovation exemption is one of the highest priorities of the SEC. The agency will keep striving to complete rules and make the crypto developers feel welcome. The purpose of this measure is to retain talent, attract innovation, and help U.S. leadership in digital assets.