Innovation Exemption to Facilitate Crypto Token Issuance
The U.S. Securities and Exchange Commission (SEC) Chair, Paul Atkins, has revealed that the innovation exemption for crypto companies will take effect in January 2026. This will enable crypto projects to issue tokens without full SEC registration.
During a CNBC interview, Atkins asserted that the agency is looking to move forward with the innovation exemption rules for crypto firms in the next month or so. This, he said, is part of the plan for the crypto industry to move away from the anti-crypto stance under the previous administration.
Accelerating Product Launches in the Crypto Space
This policy was first proposed in July 2025 to foster blockchain innovation. Initially, Atkins hinted that the innovation exemption would be established before the end of the year. However, Atkins explained during the interview that the U.S. government shutdown, which lasted throughout October and into November, derailed their plans as they were unable to do anything during that period.
The innovation exemption rules will enable crypto firms to launch products more quickly, particularly in the DeFi space. Atkins aims to provide people with a fair opportunity to work on new technologies without fear of the SEC taking sudden action against them.
We’ve had four years of repression in that industry, and it pushed innovation abroad rather than keeping it here . . . My goal now is to make people feel they can build in the United States without fearing unclear regulations.
Paul Atkins.
To that end, the exemptions will allow a slew of decentralized projects and platforms to test their ideas without burning millions on lawyers first, while giving regulators a front-row seat to see how this stuff actually works.
In this way, these companies will be able to circumvent these laws until Congress passes the crypto market structure bill, which establishes a comprehensive set of laws for regulating cryptocurrencies.
SEC's Role in the Crypto Bill and Regulatory Framework
Atkins mentioned the crypto bill, stating that they were assisting lawmakers with the technical aspects. However, he stated that the SEC has enough power to authorize the innovation exemption. Companies that participate may be required to report periodically to the SEC in exchange for the flexibility to innovate within defined guardrails.
In addition, Atkins stated that the Commission aims to transform many of the ideas discussed in 2025 into formal rules. This will happen by adding a token taxonomy, making specific exemptions, and changing the market-structure rules that are already in place.
Although these events show real progress toward clearer regulations, there are still important questions that need to be addressed.
The direction of the U.S. digital asset market in 2026 and beyond will depend on when and how much the upcoming “Regulation Crypto” plan is coordinated with Congress, as well as how the SEC and CFTC interact with each other. When asked about prediction markets, Atkins stated that the sector is regulated by the CFTC, but he noted that Americans are generally risk-takers.
Boosting Initial Public Offerings (IPOs)
The SEC chair also stated that the commission plans to implement policies next year to boost initial public offerings. He stated that the agency is looking to modernize the rule book to make the regulation fit for purpose. This marks a positive for crypto firms such as Kraken, Grayscale, and BitGo that are looking to go public in the U.S.
Additionally, he stated that the agency is also looking at the U.S. litigation situation. This is in order to set free companies that have been delayed from going public. He also mentioned that corporate governance issues that have been weaponized by a group of people to delay innovations will be looked into.
Atkins will join Nasdaq’s CEO, Adena Friedman, for a discussion today on how to make IPOs great again. He also hinted at a major speech today as he rings the bell at the NYSE, which could border on crypto regulations and the commission’s plans to create a more friendly regulatory environment for the crypto industry.