Bitcoin News Today: SEC Aims to Redefine Crypto Rules with 'Project Freedom' Launch

SEC Chairman Paul Atkins has asserted that most crypto assets do not qualify as securities, marking a significant departure from the previous administration’s approach to digital asset regulation. In a landmark speech on July 31, 2025, at the America First Policy Institute, Atkins announced the launch of “Project Crypto,” a comprehensive initiative aimed at modernizing the U.S. regulatory framework for digital assets and reinforcing America’s leadership in the global crypto market. This move follows the release of the President’s Working Group on Digital Asset Markets report titled Strengthening American Leadership in Digital Financial Technology, which outlined a strategic vision for the sector [1].

Atkins emphasized the need for clear and simple rules governing crypto asset distributions, custody, and trading. He directed the SEC staff to develop such guidelines for public comment, focusing particularly on creating “bright-line rules” and appropriate exemptions for security tokens, including initial coin offerings (ICOs), airdrops, and network rewards. These measures are intended to reduce regulatory ambiguity and create a more hospitable environment for innovation [1]. Atkins also highlighted the importance of ensuring that being classified as a security should not deter innovation but rather serve as a flexible framework for product development and investor participation.

A key component of “Project Crypto” involves ensuring freedom of choice among custodians and trading venues. The SEC plans to facilitate a competitive market for custodial services, including supporting the right of Americans to self-custody their digital assets, a principle described as a “core American value” by Atkins [1]. The initiative also seeks to modernize custody requirements for registered intermediaries and streamline regulatory processes to reduce redundancy. Additionally, the SEC is exploring the potential for “super-apps”—single licensing structures that allow trading venues and intermediaries to offer both securities and non-securities digital assets, thereby enhancing market efficiency and reducing compliance burdens [1].

Project Crypto also emphasizes the need to support innovation in on-chain systems and decentralized finance (DeFi). The SEC plans to distinguish between software publishers and intermediaries and create rational rules that accommodate decentralized systems, such as automated market makers and tokenized securities. The initiative includes exploring amendments to existing rules like Regulation NMS to better align them with on-chain trading and encouraging the tokenization of traditional assets like equities and debt instruments [1].

The broader implications of “Project Crypto” are significant for market participants, including issuers, trading platforms, custodians, and investors. The initiative signals a shift toward regulatory clarity and innovation-friendly policies, which could attract crypto businesses back to the U.S. and foster new opportunities for capital formation, product development, and market entry [1]. However, it also raises questions about compliance, risk management, and operational readiness as the sector adapts to a rapidly evolving regulatory environment. The SEC is expected to propose new rulemakings in the near term and may use interpretive or exemptive relief in the interim, creating a window for market participants to engage in the public comment process and influence the final rules [1].

The announcement of Project Crypto has been met with optimism in the market. Analysts note that regulatory clarity and the administration’s pro-crypto stance have contributed to a surge in institutional adoption and increased demand for crypto assets. For example, Bitcoin reached a new all-time high above $124,000 in early August 2025, while Ethereum saw gains of over 58% since July 14 [2]. The SEC’s initiative is viewed as a key enabler of sustained growth in the sector, particularly as it aligns with broader efforts by the Trump administration to integrate crypto into the U.S. financial system [2]. Analysts anticipate that further regulatory developments could reinforce the bull case for Bitcoin and Ethereum, with projections of significant price increases over the next several years [2].

Source:

[1] SEC Chairman Atkins Announces “Project Crypto” (https://www.aoshearman.com/en/insights/ao-shearman-on-fintech-and-digital-assets/sec-chairman-atkins-announces-project-crypto)

[2] Why Bitcoin is Headed “Much Higher” After SEC Launches Project Crypto (https://www.devere-group.com/why-bitcoin-is-headed-much-higher-after-sec-launches-project-crypto)