SEC Nominee Paul Atkins Grilled Over SBF Pardon and FTX Ties in Senate

In a fiery exchange, Kennedy slammed Atkins over what he described as a failure by federal regulators to hold the FTX leadership accountable following the exchange’s dramatic collapse in 2022. “I read in the paper that the Bankman-Frieds were trying to get a pardon,” Kennedy said. “They are crooks, and I expect the SEC to do something about it. Every time you come to this committee, I am going to pounce on you like a ninja to find out what the SEC has done, because I don’t think the SEC has done a damn thing.”

The Louisiana senator’s remarks refer to recent reports alleging that the parents of Sam Bankman-Fried, both law professors at Stanford University, have been lobbying for a pardon for their son, who was convicted last year on seven counts of fraud and conspiracy related to the collapse of FTX. The pardon issue has sparked a political firestorm, given SBF’s once-prominent status in Democratic political circles and his massive donations to political campaigns prior to FTX’s downfall.

Paul Atkins, a former SEC commissioner who served from 2002 to 2008 and currently the CEO of Patomak Global Partners, a financial consultancy, was tapped by President Trump to lead the securities watchdog amid growing debates about the SEC’s approach to crypto regulation. Patomak previously advised FTX on regulatory strategy prior to the exchange’s bankruptcy—an association that drew immediate scrutiny from lawmakers during the hearing.

Senator Elizabeth Warren (D-MA) also grilled Atkins about the impending sale of Patomak, pressing him to disclose who the buyers are and whether there could be any ongoing ties between the firm and the crypto industry if he is confirmed. “How can the American people trust the SEC to regulate crypto if its chair is selling his firm to buyers we don’t even know?” Warren asked.

Atkins maintained that he would divest fully from Patomak and all related interests in accordance with federal ethics rules. However, he declined to name any prospective buyers, citing confidentiality agreements and the preliminary stage of negotiations. "If confirmed, I will take all necessary steps to ensure there is no conflict of interest, including a complete divestiture from my current firm," Atkins said. "My commitment is to the integrity of the Commission and the protection of investors."

The hearing highlighted the growing political divide over how the U.S. should regulate the crypto industry. While some Republicans praised Atkins as a much-needed counterbalance to what they see as regulatory overreach under previous SEC leadership, Democrats raised concerns about whether his industry ties could compromise the agency’s mission.

The crypto community has largely welcomed Atkins’ nomination, viewing it as a sign that the Trump administration plans to ease regulatory pressures on digital assets. Atkins has previously criticized the SEC’s aggressive stance on crypto under former Chair Gary Gensler and has advocated for a more innovation-friendly regulatory approach. “We must strike a balance,” Atkins told the committee, “between investor protection and allowing new technologies to thrive without being strangled by red tape.”

Nevertheless, the shadow of FTX loomed large throughout the hearing. The firm’s stunning collapse—triggered by revelations of misuse of customer funds and poor internal controls—wiped out billions in investor capital and sent shockwaves through the global crypto market. The case has become a political lightning rod, with lawmakers on both sides of the aisle demanding stricter oversight and greater transparency from the industry.

As the confirmation process moves forward, it remains unclear whether Atkins will garner enough bipartisan support to secure the SEC chairmanship. His answers on the potential SBF pardon and the sale of Patomak left some senators unsatisfied, suggesting that further rounds of questioning may be ahead.

Regardless of the outcome, the hearing made one thing clear: crypto regulation will remain at the forefront of Washington's financial agenda in 2025 and Paul Atkins may soon be at the center of it.