Senator Warren Questions SEC Nominee Paul Atkins on Crypto Industry Connections
Senator Elizabeth Warren has raised concerns regarding President-elect Donald Trump's nomination of Paul Atkins as the next Chair of the Securities and Exchange Commission (SEC), focusing on Atkins' past affiliations with the cryptocurrency sector. In a detailed letter, Warren highlighted potential conflicts of interest stemming from Atkins' advisory role with the now-defunct crypto exchange FTX and his consultancy's involvement with various digital asset firms.
Atkins, a former SEC commissioner, founded Patomak Global Partners in 2009, a consulting firm that has counted banks, crypto exchanges, and decentralized finance platforms among its clients. Notably, FTX enlisted Patomak's advisory services in early 2022, months before the exchange's collapse. Warren expressed apprehension that such deep involvement with high-profile crypto entities could influence Atkins' regulatory stance on the industry.
The downfall of FTX in late 2022 sent shockwaves through the crypto market. Its CEO, Sam Bankman-Fried, was convicted in November 2023 on multiple charges, including wire fraud, resulting in a nearly 25-year prison sentence. Warren questioned Atkins about his advisory role to Bankman-Fried and whether adherence to U.S. securities regulations might have safeguarded FTX's customers.
Additionally, Warren scrutinized President Trump's interactions with the cryptocurrency sector, particularly concerning the launch of his memecoin, $TRUMP, shortly before his inauguration. She also referenced the SEC's decision to pause its lawsuit against crypto entrepreneur Justin Sun, who was later appointed as an advisor to World Liberty Financial, a decentralized finance initiative backed by Trump and his family. Warren inquired if Atkins had engaged in discussions with Trump or his representatives about Sun or related companies since his nomination.
Atkins' nomination signifies a potential shift in the SEC's approach to digital assets. The previous chair, Gary Gensler, adopted a cautious stance, asserting that most cryptocurrencies should be classified as securities and initiating several enforcement actions against crypto firms for non-compliance. In contrast, Atkins has criticized the SEC's previous approach, advocating for clearer regulations that encourage innovation within the crypto industry. He has argued that the lack of accommodating rules in the U.S. contributed to incidents like the FTX collapse, suggesting that more supportive regulations could have mitigated such outcomes.
The Senate Banking Committee is scheduled to hold Atkins' nomination hearing at 10 a.m. ET on Thursday, where these issues are expected to be central topics of discussion.