Paul Atkins to the Rescue: Crypto-Focused VCs Cheer Trump's SEC Appointment

Paul Atkins to the Rescue: Crypto-Focused VCs Cheer Trump's SEC Appointment

Cryptocurrency-focused venture capital (VC) firms are showing a positive outlook after President-elect Donald Trump’s appointment of Paul Atkins as the new chair of the U.S. Securities and Exchange Commission (SEC). VCs anticipate that Atkins will take a more crypto-friendly approach, signaling a shift away from the aggressive stance of his predecessor, Gary Gensler.

Trump’s Picks Expected to Reverse Gensler-Era Policies

Venture capitalists in the crypto space have expressed enthusiasm for Paul Atkins’ appointment, expecting the former SEC commissioner to adopt a more industry-friendly approach to cryptocurrency regulation. This contrasts sharply with the policies of Gary Gensler, who initially appeared open to crypto but took a more confrontational stance after the collapse of major crypto companies like FTX in 2022.

Gensler's hardline approach, which critics dubbed "regulation by enforcement," caused significant frustration in the crypto community. Many felt that his aggressive stance was driving away Web3 talent from the U.S. Despite these concerns, Gensler continued his policies, prompting support for Trump’s approach, which seeks to end the U.S. government’s tough stance on the crypto sector.

In the wake of securing his second term, Trump has been appointing pro-crypto individuals to key government positions, such as David Sacks as the AI and crypto czar, and Patrick McHenry, chairman of the U.S. House Financial Services Committee. Both figures are seen as likely to usher in a more favorable regulatory environment for crypto firms.

Atkins Appointment Boosts VC Optimism

The news of Paul Atkins taking the helm at the SEC has sparked optimism among cryptocurrency VCs, with some even attributing a surge in Bitcoin (BTC) prices to the announcement. On December 5, 2024, Bitcoin broke through the $100,000 mark, which many in the industry see as a sign of investor confidence following Atkins’ selection.

Steve Brotman, founder and managing partner of Alpha Partners, emphasized Atkins' experience as a former SEC commissioner and his criticism of past SEC initiatives that were seen as overly aggressive. Brotman believes Atkins' leadership could lead to a more balanced regulatory approach, particularly for Wall Street and the crypto industry.

Alex Marinier, founder and general partner at New Form Capital, expressed hope that Atkins’ appointment could help bring back crypto firms that had relocated overseas following the collapse of FTX. Marinier noted that, while many top teams have been pushed offshore, there is potential for this trend to reverse as regulations become clearer. However, he acknowledged that the process of rebuilding trust may take some time.