Congresswoman Maxine Waters, the top Democrat on the House Financial Services Committee, shared on Feb. 11 concerns about the direction of the U.S. Securities and Exchange Commission (SEC), including its oversight of digital assets, during a full committee hearing focused on the agency.
Addressing SEC Chair Paul Atkins directly, she stated: “You and I have a very different understanding about what is happening at the SEC.” She continued: “Chairman Atkins said it is ‘a new day for the SEC.’ What did he mean? Did he really mean that this SEC is now putting Wall Street and billionaires first, and America’s investors last?”
Turning specifically to crypto enforcement, Waters asserted that the agency has “dismissed cases and investigations against Trump’s crypto billionaire friends.” She further argued:
“The SEC under Chairman Atkins has yet to investigate a single instance of the potential large-scale fraud and market abuse being brazenly carried out by this Administration and its allies.”
In addition, she stated: “The President, along with his family and closest advisors, continues to enrich themselves through what appear to be insider trading and self-dealing in both the equity and crypto markets.”
During the hearing before Committee Chairman French Hill, Waters also criticized the agency’s structure and recent regulatory rollbacks. Her comments follow the departure of Commissioner Caroline Crenshaw after the Senate did not confirm her for a second term, leaving Chair Paul Atkins and Commissioners Hester Peirce and Mark Uyeda as the remaining members of a 3-0 Republican commission. She remarked:
“Today the SEC does not have a single Democratic commissioner. Again, this is extraordinary. And the SEC is not making policy in an open and bipartisan manner, with the usual public notice-and-comment process.”
“Instead, Atkins’ SEC appears to take its orders directly from the President, and avoids public comment at all costs,” she opined.
Waters also pointed to the withdrawal of 14 proposals introduced during the prior administration, including measures addressing AI-related conflicts in investment advice, expanded custody protections for digital assets and crypto platforms, ESG and cybersecurity disclosures, broker-dealer best execution and order competition rules, exchange pricing practices, oversight of alternative trading systems, large security-based swap reporting, shareholder proposal standards, and data protections for the consolidated audit trail.
The lawmaker concluded:
“Chairman Hill, it certainly is a new day at the SEC: a Wall Street and billionaire holiday.”
At the same time, significant portions of the crypto industry have embraced Atkins’ agenda, particularly the launch of “Project Crypto,” which he formally detailed during his Feb. 11 testimony. The initiative, described as a joint SEC-CFTC effort, introduces a token taxonomy distinguishing digital commodities, collectibles, and utility tools, and outlines a forthcoming “innovation exemption” designed as a regulatory sandbox.
Recent policy shifts include rescinding SAB 121 through SAB 122 to ease bank custody of digital assets, interpretative guidance indicating that many DeFi protocols and liquid staking models do not inherently constitute securities offerings, and statements suggesting meme coins are generally not treated as securities when purchased for entertainment purposes. Legislative developments such as the enacted GENIUS Act for payment stablecoins and Senate movement on the Digital Asset Market CLARITY Act have further fueled expectations of clearer jurisdictional lines between the SEC and CFTC. Supporters argue that replacing “regulation by enforcement” with formal rulemaking could unlock institutional capital and accelerate broader adoption of digital assets.
- How could political criticism of SEC Chair Paul Atkins impact crypto and capital markets?
Heightened partisan scrutiny of the SEC’s crypto enforcement stance may increase regulatory uncertainty in the near term, but it also signals potential policy shifts that investors must monitor for impacts on digital asset valuations and market oversight. - What does the all-Republican SEC commission mean for financial regulation and investor protections?
With no Democratic commissioner currently serving, investors face a regulatory environment more aligned with deregulation and industry-friendly rulemaking, potentially accelerating approvals and easing compliance burdens for Wall Street and crypto firms. - How might the SEC’s rollback of 14 prior proposals affect institutional investment strategies?
The withdrawal of rules on AI conflicts, ESG disclosures, crypto custody, cybersecurity, and trading transparency could reduce compliance costs and reporting requirements, reshaping risk assessments and capital allocation decisions across equities and digital assets. - Why are crypto markets reacting positively to “Project Crypto” and related SEC reforms?
The introduction of token taxonomy, a regulatory sandbox “innovation exemption,” SAB 121 rescission, and clearer SEC-CFTC jurisdiction through legislation like the GENIUS Act and CLARITY Act are viewed as catalysts for institutional capital inflows and broader digital asset adoption.
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