A political clash is heating up over the U.S. Securities and Exchange Commission's (SEC) new approach to crypto regulation. Congresswoman Maxine Waters has publicly criticized SEC Chair Paul Atkins, accusing the agency of easing oversight and favoring large financial institutions. This criticism comes as the SEC, now operating with an all-Republican commission, is rolling back several proposals from the previous administration and moving away from aggressive enforcement actions against crypto firms.
At the center of the regulatory shift is "Project Crypto," a joint effort between the SEC and the Commodity Futures Trading Commission (CFTC) to clearly define different types of digital assets. The goal is to separate digital commodities, utility tokens, and collectibles, providing crypto companies with clarity on which regulatory rules apply to them.
In a significant policy change, the SEC has replaced Staff Accounting Bulletin 121 (SAB 121) with SAB 122, a move that makes it easier for banks to hold crypto assets on their balance sheets. Furthermore, new guidance suggests that some DeFi platforms, liquid staking services, and meme coins may not automatically be treated as securities. This overall shift signals a softer and more structured approach to crypto policy from the regulator.
Many investors and analysts believe that clear crypto regulations, not just relaxed rules, are the real driver of market growth. For years, confusion over whether the SEC or the CFTC has jurisdiction over certain digital assets has kept institutional investors cautious. New legislative proposals, such as the GENIUS Act and the Digital Asset Market CLARITY Act, are designed to define crypto market rules and reduce legal uncertainty. An "innovation exemption" is also being considered, which could allow startups to test blockchain projects under limited regulatory oversight.
Historically, Bitcoin and the broader crypto market have responded positively when regulatory risk declines. The expectation is that if lawsuits decrease and formal rulemaking takes their place, confidence could return quickly. This could lead banks to expand crypto custody services, asset managers to accelerate Bitcoin ETF and tokenized asset launches, and venture capital funding for U.S. crypto startups to rise.
Despite these positive regulatory signals, overall market sentiment remains cautious, with Bitcoin and major altcoins still recovering from previous corrections. However, analysts note that sentiment can shift quickly. If clear crypto regulations align with supportive macro conditions—such as lower interest rates—the market could react strongly. A confirmed framework that clearly separates commodities from securities could restore investor confidence, with tokens that previously faced SEC scrutiny potentially benefiting the most.
The report concludes that while recent price trends appear bearish, the regulatory outlook looks increasingly constructive. If clarity replaces conflict, this shift in SEC crypto policy could lay the groundwork for the next major rally in Bitcoin and altcoins.
