U.S. Securities Chair Atkins Introduces "Project Crypto" for Modernizing American Securities Oversight
In a landmark move, US Securities and Exchange Commission (SEC) Chair Paul Atkins unveiled Project Crypto on July 31, 2025. This Commission-wide initiative aims to modernize securities regulation, positioning America as the global leader in the crypto industry.
Project Crypto is designed to update and clarify securities regulations to fit the realities of digital assets and blockchain technology. The primary objective is to provide clearer guidelines on when cryptocurrencies are considered securities versus non-securities. This will help entrepreneurs and market participants determine regulatory status with confidence, rather than treating all crypto as securities out of caution.
One of the key priorities of Project Crypto is to adapt custody rules and enable regulatory relief. The initiative supports the concept of "super apps" that combine various crypto-related services (e.g., trading, staking, lending) under a single license, aiming to avoid the complexity of multiple federal and state licenses.
Project Crypto aligns closely with the recommendations of the President’s Working Group on Digital Assets’ August 2025 report, which serves as a blueprint for establishing a comprehensive federal regulatory framework. This includes onshoring crypto asset distributions back to U.S. markets, fostering capital formation at home, and reducing reliance on offshore structures.
Chair Atkins envisions a regulatory environment where non-security cryptos could be traded on venues regulated by the Commodity Futures Trading Commission (CFTC), clarifying jurisdictional boundaries and promoting flexibility. The overall goal is to update and clarify regulations to foster innovation, entrepreneurship, and leadership in digital finance, ensuring the U.S. "drives," not just keeps pace with, the global digital asset revolution.
To achieve this, SEC staff has been directed to update outdated rules and regulations to support the integration of on-chain software systems into US securities markets. They are also tasked with developing guidance and proposals to support the super-app model, as well as a framework allowing side-by-side trading of crypto asset securities and non-security crypto assets on SEC-regulated platforms.
Atkins has proposed a new "innovation exemption" to allow novel business models and technologies to enter the market quickly, even if they don't fit neatly within existing SEC rules. Conditions under the exemption could include periodic reporting, use of whitelisting or "verified pool" functionality, and limitations on tokenized securities that do not comply with standards like ERC-3643.
Atkins also instructed staff to develop a comprehensive regulatory framework to bring crypto asset distributions back to the US. He emphasized the need for maximum choice in how crypto assets are custodied and traded, and for regulatory flexibility that protects investors without imposing unnecessary burdens.
Atkins expressed support for self-custody as a core American value but recognized the need for SEC-registered intermediaries like broker-dealers and investment advisers. He also called for regulatory flexibility that protects investors without imposing unnecessary burdens and emphasized the importance of enabling decentralized systems, such as automated market makers, which facilitate non-intermediated financial activity.
Market participants are encouraged to actively monitor key developments, consider engaging directly with the Crypto Task Force, and review their business structure, products, and compliance programs to position themselves for this new regulatory framework. The ultimate goal of Project Crypto is to enable America's financial markets to move on-chain (on blockchain technology), making the U.S. the "crypto capital of the world."
- The securities regulation update under Project Crypto seeks to modernize the finance industry and strengthen America's position as a global leader in the crypto industry, setting guidelines for clearer distinctions between securities and non-securities in digital assets.
- In the context of Project Crypto, Department of the Treasury's recommendations are being closely followed, with the aim to foster technology-driven innovation in America's digital finance business by updating regulations and creating a comprehensive federal regulatory framework.
- As part of Project Crypto, the SEC will work towards enhancing the crypto industry's politics, encouraging the growth of "super apps" and developing regulations that support side-by-side trading of crypto asset securities and non-security crypto assets, thus fostering a competitive and technologically advance business environment in digital finance.
