Nearly a year into the job, Securities and Exchange Commission Chair Paul Atkins says he is on a mission to "advance, clarify and transform" (ACT) crypto regulations, as the agency separates itself from its previous enforcement-heavy approach.  

On Monday, in an interview with CNBC Squawk Box's Andrew Ross Sorkin, Atkins said that the SEC is pivoting from a "regulation through enforcement" approach. 

"So rather than fending off new, innovative types of technologies, we're embracing them," he said. "So to make them so that will bring them from offshore, where people fled, to come back to the United States to really work on their products."

Since taking the helm, Atkins has launched "Project Crypto" to update the SEC's rules around digital assets and has led the agency in releasing a taxonomy with plans to debut an innovation exemption as well.

The shift marks a notable contrast with the tenure of former SEC Chair Gary Gensler, under whom the agency took a cautious approach to crypto and brought several cases against large crypto firms, saying that most cryptocurrencies were securities, while being criticized for his regulation-by-enforcement approach. Many of those cases have since been dropped.

Prediction market growing pains

At the same time, regulators are grappling with the rapid rise of prediction markets — platforms that allow users to wager on everything from elections to economic data and sports outcomes.

Companies like Polymarket and Kalshi surged in popularity since the 2024 election season.

Commodity Futures Trading Commission Chair Michael Selig has asserted his agency's jurisdiction over prediction markets, despite pushback from states that say platforms are violating local gaming and gambling laws, particularly related to sports-related bets.

Sorkin asked Atkins about President Donald Trump's market-moving comments and how some people make trades ahead of Trump's comments.

This has become a point of concern for lawmakers, who say prediction markets can be vulnerable to manipulation and have introduced bills to bar event contracts tied to war and another that would restrict elected officials from making bets on prediction markets involving "government policy, government action or political outcome." 

Sorkin asked whether the SEC would investigate people in the Trump administration or other policymakers. 

"Things like that are disturbing," Atkins said. "I can't talk to any particular investigation, but we are examining that area." 

Prediction market transactions have a traceability factor, he added. 

"Let's just say that between the Department of Justice, the CFTC and us — we're focused on that," Atkins said.