SEC Nominee Queried on Crypto, Ties to Wall Street

President Donald Trump’s pick to run the Securities and Exchange Commission hit Capitol Hill last week for his confirmation hearing, which featured cryptocurrency regulation as one of the main topics of discussion.

We’ve told you previously about Paul Atkins, a surprisingly conventional nominee for chair of the SEC. Atkins served as a commissioner of the agency from 2002 to 2008. Prior to getting the call from Trump to take over the SEC, Atkins ran Patomak Global Partners, an adviser to crypto companies and other clients in the financial industry.

The Biden administration’s SEC chair, Gary Gensler, took the position that crypto tokens should be regulated similarly to securities that are traded on financial exchanges. Now, in his written testimony to the Senate Committee on Banking, Housing and Urban Affairs, Atkins made clear he intends to draw up bespoke rules “to provide a firm regulatory foundation for digital assets through a rational, coherent, and principled approach.” What that type of regulation would look like in application remains up in the air – the Senate panel didn’t press Atkins for specifics. Republican Senator Tim Scott of South Carolina, a vocal crypto industry supporter who chairs the Senate Banking Committee, hailed the prospect that Atkins would “provide long-overdue clarity for digital assets.”

The committee’s ranking Democrat, Massachusetts Senator Elizabeth Warren, seemed less interested in Atkins’ views on crypto and more concerned about his relationships with the financial sector. Warren laid out her issues in a March 23 letter to Atkins and voiced alarm at the hearing over what she described as “breathtaking” conflicts of interest posed by the possibility of Trump’s nominee regulating the most influential institutions on Wall Street. Atkins’ personal wealth is estimated to be north of $300 million, and he has pledged to divest from Patomak. He didn’t go into detail when asked by Warren for information about who was lined up to buy his ownership stake in the firm.

For those with more niche interests in Atkins’ nomination, he also fielded questions about the future of the Public Company Accounting Oversight Board. The conservative political initiative Project 2025 put the PCAOB on the chopping block, arguing in favor of its elimination to “reduce costs and improve transparency, due process, congressional oversight, and responsiveness.” Project 2025 lists Atkins among the contributors to its prescriptions for overhauling financial regulation. For his part, however, Atkins affirmed that he believes in the board’s necessity to protecting the functioning of the financial markets.

Not surprisingly, lawmakers also probed Atkins about his role at the SEC during the financial crisis of the 2000s. That period coincided with the events that led to the implosion of the subprime mortgage market, which snarled the global economy. Atkins pointed the finger at government-sponsored enterprises such as Fannie Mae when it came to determining blame for the financial meltdown.

The questions about the financial crisis served as a reminder that the economic chaos of that era still resonates with the public nearly two decades later. Overall, though, nothing at the hearing suggested that Atkins faces a serious challenge to his confirmation.