SEC aims to launch crypto innovation exemption by the end of 2025

The U.S. Securities and Exchange Commission (SEC) plans to introduce a new “innovation exemption” to support crypto developers and digital asset firms building in the U.S., with rulemaking expected to start by the end of 2025, Chair Paul Atkins said.

The plan was revealed during a Futures and Derivatives Law Report event hosted by the law firm Katten Muchin Rosenman LLP in New York.

SEC pushes ahead with crypto exemption despite government shutdown

The SEC Chair explained that many people who build with digital assets relocate their work to other countries due to unclear or stringent regulations by the SEC. He wants to give people a fair chance to work on new technologies without worrying that the SEC will suddenly take action against them. 

Atkins said that the SEC expects to propose the official rulemaking process for the innovation exemption no later than the end of 2025 or early 2026, depending on how long this government shutdown is going to have to go.” The agency can still perform some crucial jobs, but the shutdown has halted rulemaking and made it difficult to adhere to planned schedules.

He also discussed how the SEC drove many talented developers, engineers, and business leaders out of the United States in search of better opportunities, largely due to strict and unclear rules that instilled fear. “We’ve had four years of repression in that industry, and it pushed innovation abroad rather than keeping it here,” he said. “My goal now is to make people feel they can build in the United States without fearing unclear regulations.”

Atkins added that the new exemption rule won’t remove oversight or allow unsafe practices. Instead, it will balance between safety and progress to open doors for entrepreneurs and developers who want to build responsibly but need clear rules to do so.

Lawmakers push for new crypto bills in Congress

The SEC Chair commended Congress for its efforts in shaping policies that support innovation and referred to the GENIUS Act as a big first step toward building a full national framework for digital assets. He said that the GENIUS Act helps create a more predictable and secure environment for developers, investors, and businesses who have long requested clear rules. 

He added that the coordination between the SEC and Congress will make it easier for new companies to understand the rules that apply to them and how they can comply. It will also prevent any confusion and overlapping rules that have previously made it difficult for startups to operate.

Summer Mersinger, CEO of the Blockchain Association and a former commissioner at the Commodity Futures Trading Commission (CFTC), also shared her views on the progress of crypto legislation in Congress. She said that there is a 50% chance that Congress will be able to pass a broader “market structure” bill before the end of 2025, as it still faces numerous political and regulatory challenges.

Other speakers, including Greg Xethalis, a lawyer and general counsel at Multicoin Capital, and Chris Perkins, president of CoinFund, noted that progress is still being made, even if it is slow. Xethalis stated that developers are preparing to utilize stablecoins in everyday financial applications, citing Visa’s integration of USDC as an example. Perkins said that the new rules from the GENIUS Act and the stablecoin proposals by the Treasury Department make developers more confident in building in the United States without fear.

Mersinger added that stablecoins will also be useful in larger financial processes, such as fund transfers, collateral management, and settlement in complex contracts.

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