Lee Reiners

Who Made Paul Atkins King? The SEC Won 200 Crypto Cases in Ten Years. Paul Atkins Just Forfeited All of Them. The Senate Wouldn’t Touch the Crypto Bill, So He’s Gleefully Passing It Himself, as a Rule. Lee Reiners and I Filed 33,000 Words Explaining Why Vacating This Atkins Travesty Will Be the Easiest Decision Any Court Will Ever Write. Introduction. On August 18, 2026, U.S. Securities and Exchange Commission Chairman Paul Atkins proposed Regulation Crypto Assets, a rule that would let crypto issuers sell unregistered tokens to anyone: up to $5 million with no financial statements and no SEC or state review, up to $75 million a year under a loosened version of Regulation A, with no holding period for insiders under either, plus a "safe harbor" that lets the issuer certify its own token out of the securities laws on a form no one reviews. Call this monstrosity what it is: an aberration in law and an abhorrence in policy. So @leereiners and I filed a comment letter asking the Commission to withdraw it. Every word. Here's why: For more than ninety years, the law governing the sale of securities has rested on one premise: The seller tells the truth first, and the buyer decides second. Paul Atkins proposes to reverse the order. Investor protection is not a courtesy Paul Atkins extends to markets he likes. It is the price Congress attached to the privilege of selling to the public, and Paul Atkins now proposes to waive the price and keep the privilege, for one industry, on that industry’s terms. The SEC’s 200 crypto victories were not a policy choice that Paul Atkins inherited and may discard. They were legal conclusions, reached by Article III judges appointed by six Presidents. Those judgments cannot be disappeared by Paul Atkins. The judges who entered them are still sitting, and what they decided must be respected and enforced. So when this rule reaches a courtroom, the hardest question will not come from the challengers. It will come from the bench: Counsel, for ten years your agency stood at that lectern and asked this court for judgments on the ground that these offerings were securities. Now you ask us to accept the opposite. The tokens haven’t changed. The statute hasn’t changed. Howey hasn’t changed. The only thing that changed is that Paul Atkins became Chairman. So tell us: when Article III judges appointed by six Presidents apply Howey to these offerings more than two hundred times and reach the same answer every time, and Paul Atkins then announces they were all mistaken, which of those is the law of the United States? Does Paul Atkins’s vote nullify a decade of judgments? Because if the answer is yes, the next Chairman can nullify Paul Atkins the same way, and nothing your agency says to any court will ever be worth believing again. Paul Atkins’s Release never answers that question. Across 146 pages of the Federal Register, it never explains why a decade of its own litigated positions was wrong, never cites, let alone distinguishes, a single one of the rulings it would displace, and never acknowledges those who relied on them. It simply proceeds as if none of it happened. That deafening silence is not an oversight. It's the only option available, because the honest answer is that nothing changed except the Chairman. The Gist of Our Comment Letter. For a decade the SEC told federal judges that unregistered crypto offerings harm investors, and won more than 200 times before judges appointed by six Presidents. ICOs, SAFTs, utility tokens, lending, staking: securities offerings, every time. Now it proposes to exempt the very transactions those courts found easiest to classify. The startup exemption combines what no exemption does: any number of retail investors, general solicitation, immediately tradable tokens, no intermediary, no investment limit, no financial statements, no SEC or state review. Insiders can sell on day one; the Release concedes a holding period could strengthen investor protection and rejects one anyway. An issuer may raise $75M every 12 months, then exit through a safe harbor you could drive a truck through: a checkbox on a form, effective when filed, reviewed by no one, certifying that the issuer has completed, or permanently ceased, the efforts it promised. An exit visa from oversight, stamped by the traveler. At the same time, the SEC has not applied its own interpretation to the token of the venture affiliated with the President's family. Investors, a footnote suggests, can protect themselves by contract: caveat emptor, restated by the agency created to replace it. Sections 28 and 36 are 1996 backstop provisions, not a license to build a parallel offering regime, and with Chevron gone a court will read them de novo. The Senate declined even to take up the CLARITY Act; the SEC cannot enact by rule what Congress has declined to enact by law. The Release lists monetized benefits as n/a, never estimates investor losses, and never mentions FTX, Terra, Celsius, or any hack, theft, scam, or collapse. It does not contain the words money laundering, illicit, terrorist, or Bank Secrecy Act. It never explains its reversal of a decade of its own litigated positions, as Fox, Encino, and Regents require. It issued with no public meeting. Who pays? Retail investors who buy unrestricted tokens. Who profits? Venture funds that buy at a discount, insiders who sell immediately, and platforms freed from state review, in an industry that spent $189M on the midterms by midyear. Nearly 18 years in, blockchain has no killer use case beyond speculation and trading; Big Tech will spend more than $700B this year, overwhelmingly on AI, and effectively nothing on blockchain. So the SEC proposes to give blockchain the one thing it never found on its own: a steady supply of retail buyers. The Stark Reality. Paul Atkins is not deregulating crypto. He is pardoning it. Federal judges appointed by six Presidents applied the law to crypto more than two hundred times and reached the same answer every time. They did not read it wrong. Nothing in those cases has changed except the nameplate on the Chairman’s door, and a nameplate is not a legal authority. Yet with one signature, Paul Atkins proposes to erase every one of those judgments and replace them with a vending machine: insert a form, pull the lever, and out comes a certificate declaring that the securities laws no longer apply to you. No one checks the machine, no one refills it, and Paul Atkins built it on the honor system, in an industry whose honor has already cost investors billions. Presidents pardon people. Paul Atkins proposes to pardon an asset class. The Constitution gives him no such power, and no court will pretend otherwise. (Fair warning to the TL;DR crowd: Reading the letter is not for the faint of heart. It runs more than 33,000 words and 235 footnotes. Pack a lunch sports fans.) Read our comment letter here: sec.gov/comments/S7-2026-27/…

The Senate said no, so SEC Chair Paul Atkins said yes by decree. My article documents every step of this Frankenstock tokenization debacle: how the order got issued, what it hides, how it contradicts the SEC's DTCC letter and 10 ways it bleeds investors.