- Gensler warns that Bitcoin and most crypto remain speculative and volatile.
- The SEC innovation exemption is set for January 2026 under Paul Atkins.
- Exemption allows token issuance without full SEC registration.
SEC former chair Gary Gensler warned investors this week that Bitcoin and most other digital tokens are very speculative and volatile. His remarks are a stark contrast to the deregulatory thinking of his successor, Paul Atkins, who is scheduled to introduce an innovation exemption in January of 2026. The move will reduce compliance pressure on crypto projects as long as it does not eliminate regulation.
Bitcoin volatility and market structure issues raised
Gensler, in a recent interview, referred to Bitcoin as a high-risk asset, where most crypto tokens pay no dividends or traditional returns. He said that investors need to understand the risks involved before investing in the market, and thousands of non-stablecoin tokens are highly speculative.
Also covered by Gensler was the recent outage at the Chicago Mercantile Exchange caused by a third-party data center cooling failure, which lasted 10 hours. He emphasized that these events underscore the need for robust exchange infrastructures and the continuous nature of regulatory oversight.
Gensler stated that the issue of digital assets ought not to be a partisan one in the political arena. He underscored that U.S. capital market regulations focus on transparency and equity of protection of investors, which offers a robust platform for new technology.
Atkins’ innovation exemption marks regulatory shift
The agency’s approach to crypto regulation is very different under its current SEC Chair, Paul Atkins. This can be achieved through an innovation exemption, originally proposed in July 2025 and postponed due to a government shutdown, which will permit crypto projects to issue tokens without full SEC registration. The exemption aims to accelerate the development of products in the field of decentralized finance (DeFi) and give the regulators a firsthand perspective on new business models.
The company’s leadership has been associated with the introduction of various crypto-oriented ETFs and the termination of enforcement cases initiated during Gensler’s tenure. These actions fit within a broader regulatory restructuring framework to set industry expectations and promote innovation without jeopardizing investors’ rights.
The SEC, led by Atkins, seeks to balance innovation and control, providing crypto companies with a flexible environment while minimizing risks to Gensler. The January 2026 exemption is a critical point in the regulation of digital assets in the United States, potentially leading to changes in market dynamics and compliance strategies.
