What to expect at Paul Atkins’ SEC confirmation hearing
Former US Securities and Exchange Commission (SEC) member Paul Atkins is scheduled to appear before lawmakers in the Senate Banking Committee on March 27 as part of the Trump administration’s efforts to get the president’s picks into high-level government positions.
Since US President Donald Trump took office on Jan. 20, the SEC, under the leadership of acting chair Mark Uyeda, has dropped several investigations and enforcement actions against major crypto firms, many of which had been in court for months or years. Many analysts see the SEC’s recent actions as the administration acting on its campaign promises to the crypto industry, of which some figures donated directly to the then-presidential candidate or his inauguration fund after the Nov. 5 election.
The commission’s actions — which include declaring that memecoins aren’t securities — also stand in stark contrast to its position under former chair Gary Gensler, leading many to speculate that the SEC under Trump will lead to a booming US crypto industry essentially free of regulatory scrutiny.
Atkins, whom Trump picked in December 2024 and officially nominated after taking office, received support from industry players at Coinbase and Ripple, both of which had ongoing enforcement actions brought by the SEC. The cases have since been dropped.
Given the SEC’s seeming about-face on crypto enforcement and Trump’s potential conflicts of interest with the industry — with ties to the crypto firm World Liberty Financial and the launch of his own memecoin — some lawmakers are likely to question Atkins’ views on digital assets at the confirmation hearing.
If confirmed by the Senate, Atkins could return to a soon-to-be entirely Republican-controlled SEC, with Democratic Commissioner Caroline Crenshaw expected to leave by 2026.
It’s unclear if Atkins will have the votes to pass a confirmation hearing in the banking committee or a full floor vote in the Senate. Republicans hold a 53-seat majority in the chamber with only 51 votes required to confirm a nominee, and — with the exception of former Representative Matt Gaetz for US Attorney General — have not suggested that they intend to oppose any of Trump’s picks for crucial government positions.
Democratic opposition to Atkins’ nomination
Massachusetts Senator Elizabeth Warren, the top Democrat on the banking committee who has often equated crypto with drug trafficking and other illicit actions, said in a March 23 letter to Atkins that she had concerns about his potential role at the SEC after his consulting firm, Patomak Global Partners, was an adviser to defunct crypto exchange FTX. He was also an adviser to the advocacy group Chamber of Digital Commerce.
“Your deep involvement with FTX and other high-paying crypto clients raises questions about your approach to crypto regulation — and concerns about the extent of your knowledge of FTX’s illegal activities,” said Warren, adding:
“Your financial ties to the industries you will soon regulate raise serious concerns about your ability to avoid conflicts of interest as a regulator.”
Warren suggested that some members of the Senate would likely question Trump’s pick about the SEC recently dropping enforcement cases against crypto firms, reports that Trump’s family had held talks with Binance about acquiring a stake in the company as well as a possible pardon for former Binance CEO Changpeng Zhao, how Atkins intends to apply securities laws to digital assets if confirmed, and the commission’s recent opinion that memecoins were not securities.
She hinted that Atkins may have also communicated with Republican SEC commissioners Uyeda and Hester Peirce after being nominated.
Related: SEC is waiting for a chair before setting crypto agenda — Hester Peirce
Ahead of his hearing, Atkins has already met with Republican lawmakers on the committee, including Wyoming Senator Cynthia Lummis. Cointelegraph contacted Lummis’ office for comment on Atkins’ nomination but hadn’t received a response at the time of publication.
If his nomination moves through the Banking Committee and the Senate, Atkins would likely be confirmed to a term ending in June 2031, taking over as chair from Uyeda. In addition to the commission dropping investigations and enforcement actions, the SEC acting chair has proposed abandoning rules requiring crypto firms to register with the agency.
Magazine: Ripple says SEC lawsuit ‘over,’ Trump at DAS, and more: Hodler’s Digest, March 16 – 22
The New York State Attorney General’s (NAYG) recent legal action against Galaxy Digital over its promotional ties to the now-collapsed cryptocurrency Terra (LUNA) was unfair and an abuse of the legal system, says SkyBridge Capital and founder Anthony Scaramucci.
“It’s LAWFARE, pure and simple due to an obscure but dangerously powerful New York law known as the Martin Act,” Scaramucci said in a March 28 X post.
Martin Law can “open the door for abuse”
“The law has no need to prove intent, creating a low standard of proof that can open the door for abuse like this. It shouldn’t exist,” he said.
New York’s Martin Act is one of the US’s strictest anti-fraud and securities laws, allowing prosecutors the power to pursue financial fraud cases without needing to prove intent. The NAYG alleged that Galaxy Digital violated the Martin Act over its alleged promotion of Terra, with Galaxy Digital agreeing to a $200 million settlement.
According to NAYG documents filed on March 24, Galaxy Digital acquired 18.5 million LUNA tokens at a 30% discount in October 2020, then promoted them before selling them without abiding by disclosure rules.
Scaramucci reiterated that Galaxy CEO Michael Novogratz was under the impression everything he was saying about Luna was true, as he had been deceived by Terraform Labs and its former CEO, Do Kwon.
Source: Amanda Fischer
Meanwhile, MoonPay president of enterprise, Keith Grossman, said he had never heard of the Martin Act and had to look it up using AI chatbot ChatGPT.
“It is so broad and essentially is the essence of lawfare,” Grossman said. “Sorry you got caught in the crosshairs of it, Mike,” he added.
Related: Sonic unveils high-yield algorithmic stablecoin, reigniting Terra-Luna ‘PTSD’
The filing alleged that Galaxy helped a “little-known” token, referring to LUNA, increase its market price from $0.31 in October 2020 to $119.18 in April 2022 while “profiting in the hundreds of millions of dollars.”
Asset manager and investor Anthony Pompliano said he isn’t familiar with the details of the lawsuit but vouched for Novogratz, calling him a “good man” who has devoted a lot of time and money to helping others.
The Terra collapse is one of the crypto industry’s most infamous failures. In March 2024, SEC attorney Devon Staren said in the US District Court for the Southern District of New York that Terra was a “house of cards” that collapsed for investors in 2022.
Magazine: Arbitrum co-founder skeptical of move to based and native rollups: Steven Goldfeder
Billionaire investor Elon Musk has sold his social media platform X to his AI startup xAI, sparking controversy as it coincides with a US judge rejecting his bid to dismiss a lawsuit tied to the social media platform.
The transfer of ownership of X to xAI on March 28 means that the class-action lawsuit against Musk — accusing him of defrauding former Twitter shareholders by delaying the disclosure of his initial investment in the social media platform — has become “a whole lot spicer,” Cinneamhain Ventures partner Adam Cochran said in a March 28 X post.
Acquisition may open up xAI to more ‘exposure’
On the same day that Musk said “xAI has acquired X in an all-stock transaction,” a US judge reportedly rejected Musk’s attempt to dismiss the lawsuit. Cochran said it has “opened up his AI entity to exposure here too, and it’s a much bigger pie.”
Source: Grok
Musk said the deal values xAI at $80 billion and X at $33 billion, factoring in $12 billion in debt from the $45 billion valuation. He originally bought X, formerly Twitter, for around $44 billion in April 2022.
“xAI and X’s futures are intertwined. Today, we officially take the step to combine the data, models, compute, distribution and talent,” Musk said.
Source: Bryan Rosenblatt
“This combination will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach,” he said, adding:
“This will allow us to build a platform that doesn’t just reflect the world but actively accelerates human progress.”
However, Cochran claimed that “Musk used his pumped up xAI stock to pay multiple times over value for X, but still take an $11B loss on the transaction.” He said that Musk is “screwing over xAI investors, and X investors” and was executed to sell user data to xAI.
Related: Elon Musk’s ‘government efficiency’ team turns its sights to SEC — Report
xAI is best known for its AI chatbot “Grok” which is built into the X platform. When Musk released it in November 2023, he claimed it could outperform OpenAI’s first iteration of ChatGPT in several academic tests.
Source: Raoul Pal
Musk explained at the time that the motivation behind building Grok is to create AI tools equipped to assist humanity by empowering research and innovation.
While Cochran said that Grok being valued at $80 billion is an “insanely dumb valuation,” crypto developer “Keef” disagrees. Keef said, “This is shady all around, but given the day, Grok is genuinely probably the top model for various tasks.”
Magazine: Arbitrum co-founder skeptical of move to based and native rollups: Steven Goldfeder
Five Democratic lawmakers in the US Senate have called on leadership at regulatory agencies to consider the potential conflicts of interest from a stablecoin launched by World Liberty Financial (WLFI), the crypto firm backed by US President Donald Trump’s family.
In a March 28 letter from the US Senate Banking Committee, Massachusetts Senator Elizabeth Warren and four other Democrats asked the Federal Reserve’s committee chair on supervision and regulation, Michelle Bowman, and acting comptroller of the currency, Rodney Hood, how they intended to regulate WLFI and its stablecoin, USD1.
March 28 letter from five Democratic senators to OCC, Fed leadership. Source: US Senate Banking Committee
The letter came as members of Congress are considering legislation to regulate stablecoins through the Guiding and Establishing National Innovation for US Stablecoins, or GENIUS Act. The bill, if signed into law, would essentially allow the Office of the Comptroller of the Currency (OCC) and Federal Reserve to oversee stablecoin regulation, including for issuers like WLFI and its USD1 coin.
Trump also signed an executive order in February attempting to have all federal agencies — purportedly including the OCC — “regularly consult with and coordinate policies and priorities” with White House officials, giving the US president unprecedented control.
“President Trump’s involvement in this venture, as he strips financial regulators of their independence and Congress simultaneously considers stablecoin legislation, presents an extraordinary conflict of interest that could create unprecedented risks to our financial system and to the integrity of decisions made by the [Fed and OCC],” said the letter, adding:
“The launch of a stablecoin directly tied to a sitting President who stands to benefit financially from the stablecoin’s success presents unprecedented risks to our financial system.”
Related: Trump’s USD1 stablecoin deepens concerns over conflicts of interest
Since World Liberty launched in September 2024 — months before the US election and Trump’s inauguration — many of the firm’s goals have been shrouded in secrecy. The project’s website notes that Trump and some of his family members control 60% of the company’s equity interests.
As of March 14, World Liberty had completed two public token sales, netting the company a combined $550 million. On March 24, the project confirmed launching its first stablecoin on the BNB Chain and Ethereum. The president’s son, Donald Trump Jr., also pitched USD1 from the DC Blockchain Summit on March 26 with three of WLFI’s co-founders.
Magazine: Trump’s crypto ventures raise conflict of interest, insider trading questions
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