SEC Pushes for “Innovation Exemption” to Boost U.S. Crypto Development Amid Shutdown

The U.S. Securities and Exchange Commission (SEC) is working toward establishing an “innovation exemption” to support companies developing digital assets and other emerging technologies within the United States. SEC Chair Paul Atkins revealed that the agency aims to formalize the exemption by late 2025 or early 2026, despite delays caused by the ongoing government shutdown.

Speaking at the Futures and Derivatives Law Report event in New York, hosted by Katten Muchin Rosenman LLP, Atkins emphasized that fostering crypto innovation remains his top priority. He acknowledged the industry’s struggles over the past four years, attributing the stagnation to restrictive policies that pushed innovation overseas. The exemption, Atkins explained, would encourage developers to build domestically rather than relocate to foreign jurisdictions.

Atkins highlighted that formal rulemaking—paused due to the shutdown—would move the SEC beyond its previous “regulation-by-enforcement” approach. Instead, it would introduce structured guidance for digital asset companies, marking a significant shift toward a pro-innovation regulatory environment.

In discussing legislative progress, Atkins praised congressional efforts on the GENIUS Act, the first major U.S. law focused on stablecoins. While the SEC has limited involvement, he noted optimism around potential market structure reforms. Industry leaders, however, expressed mixed views on the bill’s chances of passing this year.

The GENIUS Act has already prompted the Treasury Department to propose stablecoin regulations, which experts believe will catalyze broader adoption. Visa’s integration of USDC was cited as an early sign of real-world crypto use cases, while analysts expect rapid growth in stablecoin applications across financial systems.

Despite current hurdles, Atkins reaffirmed his commitment to ensuring the U.S. becomes a welcoming environment for blockchain and crypto innovation—a signal of the SEC’s evolving stance toward digital assets.