United States Securities and Exchange Commission (SEC) Chair Atkins Presents "Project Crypto" for Modernizing Securities Oversight in America

United States Securities and Exchange Commission (SEC) Chair Atkins Presents "Project Crypto" for Modernizing Securities Oversight in America

Project Crypto: SEC's Initiative to Modernize U.S. Securities Regulation for Digital Assets

The Securities and Exchange Commission (SEC) has announced a new initiative, Project Crypto, aimed at modernizing the U.S. securities regulatory framework to support the growth of crypto asset distributions, custody, and trading in the United States. The goal is to establish the country as the global leader in crypto finance.

The project, led by SEC Chairman Paul S. Atkins, was publicly introduced at the end of July 2025. It represents a Commission-wide effort to create clear, updated frameworks that facilitate innovation while preserving investor protections.

Project Crypto is structured around five key pillars:

1. Bringing Crypto Asset Distributions Back to America: The initiative aims to establish a regulatory framework that defines when crypto assets qualify as securities, creating purpose-built disclosure and exemption rules for offerings like ICOs, airdrops, and network rewards. It also accommodates projects that want to operate within securities law frameworks, emphasizing that being regulated as a security should be seen as a flexibility and protection, not a stigma.
2. Expanding Custody and Trading Options: Modernizing custody rules so registered intermediaries can handle crypto assets effectively while preserving Americans’ right to self-custody their digital property. This includes updating custody regulations designed before the crypto era and providing exemptive relief where suitable, giving market participants regulatory choices that suit their operations best.
3. Enabling "Super-Apps" Through Horizontal Integration: Allowing licensed securities intermediaries to offer a broad array of crypto-related services—such as trading non-security crypto assets, staking, and lending—under a single license. This reduces regulatory burden and fosters more competition and innovation in crypto markets.

The initiative also involves transitioning U.S. markets towards on-chain infrastructure, reflecting a shift away from outdated analog regulatory models to ones aligned with blockchain technology and decentralized finance.

Atkins emphasized that "most crypto assets are not securities," signaling a significant shift from prior SEC positions and aiming to provide clarity that will remove uncertainty for market participants. The initiative is further grounded in the bipartisan legislative context, including the GENIUS Act that established federal stablecoin regulation, and it aligns with the President’s Working Group on Digital Asset Markets’ report, which offers a regulatory blueprint for leading global blockchain and crypto technology.

As of early August 2025, Project Crypto is in the early stages of implementation. Atkins has directed SEC staff to begin drafting straightforward regulations for public notice and comment and indicated that the agency will also consider using interpretive and exemptive powers to prevent outdated rules from stifling crypto innovation while the formal rulemaking is underway.

Atkins also outlined a regulatory agenda focused on decentralized finance and launching a new "innovation exemption" to accelerate the commercial deployment of novel technologies. He prioritizes enabling "super-apps" that allow securities intermediaries to offer a wide range of services, including trading in crypto asset securities, non-security crypto assets, crypto services, and traditional securities, under a single license.

SEC staff is directed to develop guidance and proposals to support the super-app model. Atkins also calls for evaluating the use of Commission authority to permit certain non-security crypto assets to trade on non-registered venues, including state-licensed and CFTC-regulated platforms. He emphasizes the need to streamline licensing structures and avoid duplicative regulatory burdens, consistent with the PWG Report.

Atkins committed to reshoring crypto businesses and directed Commission staff to draft clear rules for the distribution, custody, and trading of crypto assets. The "innovation exemption" would be principles-based, requiring compliance with core objectives of federal securities laws without imposing rigid or incompatible requirements.

In summary, Project Crypto represents a high-profile, strategic effort by the SEC to modernize the U.S. securities regulatory framework specifically for digital assets, aiming to foster innovation, enhance investor protections, reduce fragmentation, and establish America as a global leader in crypto finance. The initiative is actively developing rules and regulatory pathways with public engagement anticipated soon.

1. America's business sector, particularly the finance industry, stands to benefit significantly from the SEC's Project Crypto, as it focuses on modernizing securities regulation to accommodate digital assets, offering a path for innovation within the crypto ecosystem.
2. In the quest to make the United States a global leader in crypto finance, Project Crypto utilizes technology as a key tool, transitioning traditional securities regulations towards on-chain infrastructure and decentralized finance, aligning with the evolving nature of crypto and blockchain technology.

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