White House Reviews SEC Crypto and Hedge Fund Plans

The White House is reviewing two SEC proposals on digital assets and hedge fund disclosures, sent March 20 by Chairman Paul Atkins. Major regulatory shifts ahead.

The Securities and Exchange Commission has sent two proposed rules to the White House for review. One targets digital assets. The other takes aim at how hedge funds and private equity firms report their financials. Both landed at the Office of Management and Budget on March 20, per a US government website notice made public Monday.

The timing is no coincidence. SEC Chairman Paul Atkins previewed the sweeping digital asset proposal just last week during a formal speech. The rule is expected to shake up how crypto firms interact with existing financial law.

One Exemption That Could Rewrite the Rules

At the center of the digital asset proposal sits a long-awaited “innovation exemption.” Atkins confirmed it during his speech. Crypto firms could avoid registering as brokers, exchanges, or other regulated entities for a limited time window.

That is a significant shift from how things worked under Atkins’ predecessor, Gary Gensler. The Gensler-era SEC leaned heavy on enforcement. Atkins has been pushing the opposite direction since taking the chair.

The exemption does not last forever. It gives firms a grace period, not a permanent pass. But for a sector that has long complained about unclear rules and registration burdens, even that is a notable opening.

The Hedge Fund Side Nobody’s Talking About

The second proposal is about Form PF. Hedge funds, private equity firms, and other private funds use Form PF to report performance data and risk metrics to financial regulators. It is not glamorous. But the changes being considered could be substantial.

Atkins flagged this back in September of last year. He told SEC staff to look at trimming those disclosure requirements. His argument was direct: the government’s use of Form PF data might not justify what he called the “massive burdens” placed on investment managers.

The Gensler-era SEC had expanded Form PF significantly. After the collapse of Archegos Capital Management in 2021, the amended form required new data points. Significant margin calls. Counterparty exposure. The kind of information designed to catch the next Archegos early.

Atkins pushed the effective date of those Gensler-era disclosures back to October 1. That deadline extension is already in place. The new proposal, now under White House review, could cut further.

What OMB Review Actually Means

The proposals sitting with the Office of Management and Budget does not mean they pass automatically. OMB review is a required federal step before new rules take effect. It adds a layer of scrutiny, and outcomes are not always predictable.

Both plans were submitted March 20 but only appeared publicly on Monday. That gap between submission and public disclosure is standard procedure, not a sign of secrecy.

The SEC’s broader crypto regulatory direction has been under heavy scrutiny from multiple corners of Washington, with some lawmakers questioning whether the current approach goes too far and others arguing it does not go far enough.

Atkins has been clear about where he stands. Investment managers face “massive burdens,” he said. Crypto firms have been stuck in a regulatory grey zone for years. These two proposals, different in focus, reflect the same underlying philosophy: pare back where the cost exceeds the benefit.

Whether the White House agrees remains the next question.