S.E.C. Chairman Paul Atkins unveiled 68-page guidance insulating crypto firms from securities regulations, marking a cozier regulatory stance. At the Digital Asset Summit, he emphasized flexibility, with the CFTC endorsing prediction markets. Critics note the S.E.C. and CFTC are prioritizing industry growth over consumer protections, a stark contrast to Gary Gensler’s enforcement-heavy approach under Biden.

The S.E.C. dropped lawsuits against Coinbase and Kraken, settling with Justin Sun, a Trump ally. Atkins, a crypto ally, previously consulted for the Digital Chamber, which organized the summit. His outreach reflects a shift from Gensler’s strict securities law application to digital assets.

Prediction markets like Kalshi and Polymarket now fall under CFTC oversight, challenging state gambling laws. The agencies’ joint policies align with pending congressional legislation, though delays from banking lobbies persist. Chiliz, a crypto firm, declared U.S. legal clarity post-guidance.

Trump’s crypto venture and industry donations fueled this regulatory pivot. Critics argue the cozy dynamic risks undermining investor safeguards. Yet, the S.E.C. insists the guidance is standard practice, while the CFTC claims it fosters innovation. The move signals a transformative, though contentious, era for crypto regulation.