U.S. Securities and Exchange Commission Chairman Paul S. Atkins has signaled a potentially meaningful shift in how the agency views fundraising pathways for smaller issuers, including companies tied to crypto asset securities. Speaking at a meeting of the SEC’s Small Business Capital Formation Advisory Committee in Washington, D.C., Atkins argued that Regulation A is no longer functioning as an effective framework for broad-based capital formation and should be reassessed.
The remarks stand out because they explicitly included crypto-related issuers in the discussion. Rather than focusing only on enforcement risk or investor warnings, Atkins framed the issue around market access, regulatory efficiency, and whether existing securities rules are still fit for purpose in a changing capital-raising environment.
Atkins says Regulation A is not serving issuers well
Atkins used the committee’s anniversary meeting to highlight longstanding barriers facing small businesses and emerging issuers. His central criticism was that Regulation A, despite earlier reforms, has not become a practical or widely adopted route for raising capital. He said the framework has failed to become a viable option for all issuers, including certain crypto asset securities offerings, because compliance requirements can be disproportionately costly.
That assessment matters because Regulation A has often been discussed as a middle ground between full public registration and narrower private offering exemptions. In theory, it should help smaller businesses access funding while preserving investor safeguards. In practice, Atkins suggested, the framework has not delivered on that promise at sufficient scale.
Raising the cap did not reverse the trend
Atkins pointed to a gap between the rule’s intent and its actual usage. While total capital raised under Regulation A has exceeded the combined amount raised through Regulation Crowdfunding and Rule 504, it remains far below what issuers have raised under Rule 506(b) and Rule 506(c). That comparison underscores the limited role Regulation A still plays in the broader fundraising market.
He also noted that previous efforts to boost adoption have not produced the hoped-for result. In 2021, the SEC increased the offering ceiling from $50 million to $75 million, a move intended to make the exemption more attractive. But according to Atkins, that higher cap did not trigger a meaningful wave of new activity. Instead, the number of Regulation A offerings has declined over the past two years, reinforcing concerns that the problem is structural rather than merely numerical.
Possible reforms could target flexibility and liquidity
Rather than presenting a final policy blueprint, Atkins asked the advisory committee to evaluate both broad and targeted changes. Among the questions he raised was whether allowing at-the-market offerings, which are currently prohibited under Regulation A, could improve issuers’ access to capital without weakening investor protection standards.
He also raised the issue of secondary market liquidity, asking whether state law preemption for secondary resales under Tier 2 offerings might help improve trading conditions. Liquidity has long been one of the weak points of many exempt securities offerings, and any move that reduces friction in resale markets could make the exemption more practical for issuers and investors alike.
These questions suggest that the SEC leadership is not only examining the upfront cost of using Regulation A, but also the downstream market realities that affect whether the exemption is commercially viable. If issuers cannot efficiently raise capital or if investors face limited exit opportunities, the exemption becomes less attractive regardless of its formal availability.
Geographic concentration highlights uneven adoption
Another issue Atkins emphasized was the narrow geographic distribution of Regulation A use. He said offerings are concentrated in six states, while most other states have seen two or fewer deals. That imbalance raises questions about whether the rule is being used only in specific legal, financial, or industry ecosystems rather than as a national fundraising tool.
By calling for analysis of that pattern, Atkins signaled that the SEC wants to understand whether the problem lies in state-level frictions, market awareness, legal costs, intermediary support, or issuer preferences. For policymakers, this geographic concentration may be evidence that the rule is not scaling in the way it was originally intended to.
Why the crypto reference matters
The most notable aspect of Atkins’ comments for digital asset markets was his direct acknowledgment that issuers of certain crypto asset securities face burdens under the current Regulation A regime. That framing marks a different tone from the more restrictive posture often associated with crypto policy debates in recent years.
Instead of treating digital asset projects as outliers, Atkins appeared to place them within the broader mission of capital formation. That does not mean the SEC is abandoning investor protections or endorsing any specific token model. But it does suggest the agency may be more open to adapting existing securities pathways so that compliant blockchain-based ventures are not automatically shut out by excessive cost or procedural complexity.
For crypto startups and token-related businesses trying to operate within U.S. securities law, that could be significant. If Regulation A becomes more workable, it may offer a more realistic fundraising route for projects that fall within the securities perimeter but still need a structure suitable for early-stage growth.
No final rule yet, but the policy direction is clearer
Atkins did not announce a final rulemaking package, and no immediate regulatory amendment was unveiled at the meeting. Still, his comments set a clear policy tone: the SEC is willing to revisit whether one of its existing exempt offering frameworks is imposing too much friction on legitimate capital formation.
For the crypto industry, the signal is especially important because it comes from the top of the agency and ties digital asset issuers to a wider conversation about modernizing capital markets regulation. If the review leads to tangible reforms, Regulation A could evolve from a niche exemption into a more usable channel for compliant fundraising.
For now, the takeaway is not that the rules have changed, but that the debate has clearly advanced. The SEC is openly questioning whether Regulation A, in its current form, is doing enough for small businesses and emerging sectors. And by putting crypto issuers squarely into that discussion, Atkins has opened the door to a potentially important recalibration of U.S. fundraising policy.