“It is a new day at the SEC,” said Paul Atkins just about a month after he was sworn in as the 34th Chairman of the Securities & Exchange Commission.
Appearing May 15 at the 12th Annual Conference on Financial Market Regulation, the new Chair emphasized his vision of an SEC that will utilize economic and cost/benefit analysis before adopting new rules for SEC registrants, while maintaining and adhering to investor protection.
“High-quality economic analysis is an essential part of any SEC rulemaking. It is critical that a rule’s potential benefits and costs be considered in ensuring that it is in the public’s interest. It also helps that it happens to be the law.”
“In choosing when and how to regulate our markets we should be cognizant to measure twice and cut once. Otherwise, we risk damaging our markets and unnecessarily adding costs to issuers and investors,” he said.
Atkins noted that during his term as SEC Commissioner during two prior administrations, “I often emphasized the need for rigorous economic analysis. As Chairman, I aim to ensure that those principles are the bedrock upon which our sound regulatory policies are built. It is important for us as an agency to ensure that thorough and unbiased economic analysis is not being overshadowed by any driving desire to implement regulatory measures that impose unnecessary burdens on our markets.”
“Before we act, we first must identify a problem to be solved and propose a resolution that is tailored to solve it – rather than create a solution in search of an unidentified problem,” he added.
Atkins said that the SEC, in its regulatory capacity, “is tasked to balance investor protection with promoting capital formation and market efficiency. In years past, the Commission has unfortunately demonstrated a tendency to prioritize regulatory expansion over meticulous economic analysis, potentially jeopardizing this delicate balance.”
Atkins reiterated his concern over recently approved rules which placed financial burdens on registrants and market participants without providing concrete evidence of benefit to investors.
He noted that, “like it or not, we operate in a global environment. There are alternatives, and investors can vote with their feet and pocketbooks.”
Appearing a few days later at the annual “SEC Speaks” conference hosted by the Practicing Law Institute on May 19, Atkins stated, “As I begin my tenure as Chairman, I can tell you that we are getting back to our roots of promoting, rather than stifling, innovation. The markets innovate, and the SEC should not be in the business of telling them to stand still.”
His comments clearly pointed to a lighter regulatory approach, and he specifically citied Cryptocurrency and investments in Private Funds as two of the Commission’s initial priorities.
Both Atkins and the current White House administration have been vocal proponents of crypto assets. Prior to taking the Chair at the SEC, he served as CEO of Patomak Global Partners, a FinTech and risk management consultancy with expertise in crypto assets.
“The crypto markets have been languishing in SEC limbo for years,” he said. “Initially, the SEC first pursued what I call the “head-in-the-sand” approach, perhaps hoping that crypto would go away. Then, it pivoted and pursued a shoot-first-and-ask-questions-later approach of regulation through enforcement. The ‘just come in to visit’ entreaty often meant coming home to a subpoena. It seemed like a catch-22 for market participants. This environment did not create trust.”
Regarding Private Funds, Atkins said that he planned to ask the Commission to reconsider qualification criteria that prohibit retail investors from participating in private fund assets, including hedge funds and private equity funds.
“Allowing this option could increase investment opportunities for retail investors seeking to diversify their investment allocation in line with their investment time horizon and risk tolerance,” in an industry which, according to Atkins has “almost tripled from $11.6 trillion to $30.9 trillion” in the last 10 years.
The federal rule requiring crypto platforms to report users’ transactions to the IRS has been repealed with the President’s signing of a joint congressional resolution nullifying the DeFi Broker Rule.
Introduced in June 2024 and finalized by the Treasury Department in December 2024, the regulation would have mandated platforms facilitating digital asset transactions, including decentralized finance (DeFi) services, to report user activity and identities on a new IRS Form 1099-DA, with implementation set in stages in 2025, 2026 and 2027.
The new IRS form and its related requirements were controversial from the start, causing both the House and Senate to pass resolutions earlier this year, paving the way for President Trump’s signature.
The repeal was enacted through the Congressional Review Act, which allows Congress to overturn recently issued federal rules.
Oscar Tang, a Chinese American businessman and philanthropist, last month sort of won a tax battle with the IRS over charitable donations of early Chinese paintings to New York’s Metropolitan Museum of Art, including an 850-year-old silk scroll which generated considerable disagreement of its appraised value by the IRS.
The over decade-long case centered on deductions claimed by Tang’s family partnership for donations made between 2010 and 2012. Initially, the partnership filed for tax deductions for five paintings reportedly appraised for $74 million. The final April 2025 court ruling allowed the partnership to deduct $54 million, significantly more than the IRS’s push for zero deductions.
The IRS’s challenge was based on valuation concerns and the legitimacy of the appraiser, China Guardian, a Beijing-based auction house. The IRS argued that China Guardian was not a “qualified” appraiser under U.S. tax law, which could have invalidated the entire deduction. However, the court found that Tang had relied on the auction house in good faith, preserving most of the deduction. The IRS successfully disputed the value of one painting, the 850-year-old Palace Banquet, which had been appraised at $26 million but was later adjusted to $12 million, triggering a $2 million penalty for Tang’s partnership.
The case highlights the complex tax rules surrounding donations of property, especially artwork. Unlike cash or publicly traded securities, valuing art and collectibles is highly subjective and closely scrutinized. Claiming such deductions requires a detailed process that includes a formal appraisal for non-cash donations exceeding $5,000, and donors must use qualified appraisers who regularly perform such evaluations. Incorrect valuations or non-compliance with IRS appraisal standards can result in disallowed deductions and penalties.
The Tang decision serves as a cautionary tale for donors—whether wealthy or not—underscoring the importance of following IRS requirements to the letter when donating high-value property. The court’s ruling also emphasizes that the IRS aggressively challenges inflated valuations, even when donors believe they have acted in good faith. As a result, anyone making large charitable contributions should ensure accurate, well-documented appraisals to avoid costly legal disputes.
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