On September 29, 2025, U.S. Securities and Exchange Commission (SEC) Chairman Paul Atkins announced plans to implement more relaxed regulatory policies and advance a proposal from the Trump era that would allow listed companies to disclose financial reports semi-annually instead of every 90 days. This move signifies a shift in U.S. financial regulation from strict oversight to a more flexible, market-adaptive "light-touch" regulatory model, particularly aligning with the unique needs of the crypto industry.
I. Transformation in Regulatory Thinking: The SEC's "Minimum Effective Dose" Principle
The SEC's policy change represents a significant shift from the stringent regulations of the Biden administration to the "minimum effective dose" approach proposed by Atkins. Atkins criticized the "aggressive regulation" policies implemented by former Chairman Gary Gensler, arguing that regulation should protect investors while maximizing support for business development. He emphasized that the market should determine the frequency of financial reporting based on company size, industry characteristics, and investor needs, rather than being mandated by the government. This regulatory philosophy applies not only to traditional businesses but also to the crypto market, indicating the SEC's gradual acceptance of this more flexible regulatory approach.
II. The Unique Nature of Crypto Businesses: Technology-Driven and Global
Unlike traditional businesses, the rapid development and technological characteristics of the crypto asset market create significantly different disclosure needs. The core of crypto projects lies in real-time on-chain data (such as transaction volume, active addresses, etc.) and relies on decentralized community governance for decision-making. Traditional quarterly reports cannot accurately reflect the rapid changes in technological development and market feedback for crypto projects. More importantly, the crypto market operates 24/7, with price volatility far exceeding that of traditional assets. Therefore, traditional financial statement disclosure methods struggle to keep pace with these emerging projects.
III. Advantages of the Semi-Annual Reporting System: Improving Information Quality and Reducing Costs
If the SEC's proposal is implemented, allowing companies to independently choose the frequency of information disclosure, it would undoubtedly benefit the crypto industry. First, companies would no longer need to rush financial reports under the pressure of quarterly deadlines. Instead, they could provide more in-depth disclosures at key technological or market milestones, ensuring information quality. Second, eliminating quarterly reporting would help reduce compliance costs, especially for crypto companies still in their startup phases. Lower reporting frequency would save significant legal, auditing, and human resources, allowing them to focus on long-term strategies.
Furthermore, the semi-annual reporting system aligns better with the technology development cycles of crypto projects, avoiding potential delays in technological iterations caused by rigid quarterly reporting schedules. Crypto projects update extremely quickly, and a semi-annual reporting frequency can more accurately reflect a project's technological progress rather than focusing solely on short-term financial data.
IV. Investor Protection: Balancing the Right to Know and Transparency
Although eliminating quarterly reports might reduce the frequency of some information disclosures, it does not equate to reduced transparency. Crypto projects often provide real-time business metrics through on-chain data, which can often reflect a project's health more accurately than traditional financial statements. Simultaneously, the inherent transparency of blockchain technology ensures that information is public and immutable, further enhancing the credibility of disclosures.
However, information asymmetry remains an issue for small and medium-sized investors. Institutional investors typically have the resources to continuously track company developments, while retail investors primarily rely on public financial reports. How to ensure all investors' right to know while reducing reporting frequency is a key issue the SEC needs to balance.
V. Global Impact: The Spillover Effects of the U.S. Regulatory Shift
This change by the SEC does not only affect the U.S. market; it could have profound implications for global financial regulatory frameworks. If the U.S. can attract more crypto businesses and investors through more flexible disclosure requirements, other financial centers may need to reassess their own regulatory policies to remain competitive. Atkins has explicitly criticized certain EU regulatory policies (such as the Corporate Sustainability Reporting Directive), arguing that these mandatory requirements could increase business costs, ultimately borne by U.S. investors.
Conclusion: Regulation Adapting to Market Changes
The SEC's proposal reflects the fundamental differences between the development of crypto businesses and traditional financial markets. This is not merely a policy change regarding the frequency of information disclosure but part of financial regulation gradually adapting to technology-driven emerging markets. The transparency and decentralized nature of blockchain technology may provide new standards for future financial information disclosure. The regulatory "thumb" is gradually being lifted precisely to allow market and technological innovation to flourish in a more flexible and fair environment.
