SEC chief accused of misreading Adam Smith to justify crypto deregulation
Critics argue Paul Atkins conflates historical coincidence with influence, ignoring the founders’ warnings about private economic power while the SEC retreats from enforcement.
Securities and Exchange Commission chairman Paul Atkins has faced criticism for his interpretation of American history and economic theory, with scholars arguing he misreads Adam Smith and the founding fathers to support a deregulatory agenda. Speaking at the Economic Club of New York on 30 June, Atkins asserted that the Declaration of Independence and Smith’s “Wealth of Nations” share a foundational conviction to trust individuals over institutions. He described the founding documents as reflecting Smith’s central themes, framing the government as a structure built to be “as light as prudence would permit.”
Lee Reiners, a lecturing fellow at Duke University, published a critique arguing that Atkins turns the coincidence of 1776 into a claim of direct influence. Reiners points out that Thomas Jefferson acquired “The Wealth of Nations” between 1784 and 1789, at least eight years after drafting the Declaration. While Jefferson may have encountered Smith’s ideas earlier, Reiners notes there is no definitive evidence the book shaped the Declaration, with Jefferson himself describing it as an expression of the “American mind” rather than a specific text.
The critique highlights that Atkins’ speech omitted the founders’ explicit warnings about private economic factions. James Madison identified the unequal distribution of property as a source of faction, while Jefferson called for the nation to “crush in its birth the aristocracy of our monied corporations.” Reiners argues that by focusing on state power while ignoring private interests, Atkins ignores a core republican principle: that private power must remain subject to public law to prevent the corruption of liberty.
This historical framing is particularly relevant to the SEC’s recent approach to cryptocurrency enforcement. Atkins has touted the agency’s response to President Trump’s call to make America the “Crypto Capital of the World,” which has involved dismissing or settling the majority of outstanding crypto enforcement actions. Several of these settlements have been on favourable terms for defendants with business ties to the president or his family, raising questions about the impartiality of the regulatory retreat.
The political and financial stakes are significant. The crypto industry was the top corporate donor in the 2024 election cycle and has reportedly amassed a nine-figure campaign arsenal for the upcoming midterms. The president’s own financial disclosure indicates he earned more than $1.4 billion in income from family crypto ventures in 2025, creating a direct personal interest in the regulatory environment Atkins is shaping.
Reiners argues that Atkins’ agenda is difficult to reconcile with Smith’s own views on banking. Smith supported restricting small-denomination bank notes to protect poor labourers, accepting that such rules violated “natural liberty” if necessary to prevent social harm. Similarly, the Constitution vested authority over the monetary system in Congress to prevent the chaos of paper currency. Both Smith and the Framers concluded that private monetary innovation must remain subject to public law, a principle critics say is currently being tested.
The SEC was created following the Securities Acts of 1933 and 1934 in response to the Great Depression and widespread market fraud. At the time, critics denounced the legislation as an attempt to “Russianize everything,” yet the rules helped restore confidence in American capital markets. Reiners contends that by retreating from enforcement against politically connected firms, Atkins risks eroding the public belief that rules apply equally, a belief that remains essential for market trust and investment.
