SEC Chairman Paul Atkins launches "Project Crypto" to lead US in blockchain & crypto innovation.

SEC Chairman Paul Atkins launches "Project Crypto" to lead US in blockchain & crypto innovation.

SEC Chairman Paul Atkins has announced the launch of "Project Crypto," a comprehensive initiative aimed at modernizing US securities regulation and positioning the United States as a global leader in blockchain and crypto innovation. This initiative, unveiled on July 31, 2025, at the America First Policy Institute in Washington, D.C., signifies a significant shift in the regulatory approach towards digital assets.

The "Project Crypto" initiative is designed to integrate "on-chain" software systems into US markets, enabling decentralized finance and launching a new "innovation exemption" to accelerate the commercial deployment of novel technologies. Atkins emphasized the importance of providing regulatory clarity and fostering innovation in the digital asset market, aligning with the vision of President Trump to usher in the "Golden Age of Crypto."

Key aspects of Project Crypto include:
- Drafting clear rules for the distribution, custody, and trading of crypto assets, subject to public notice and comment.
- Collaborating with the Crypto Task Force to swiftly develop rule proposals aligned with the recommendations from the Presidential Working Group on Digital Asset Markets (PWG) Report.
- Considering the use of interpretative, exemptive, and other authorities to ensure outdated rules do not hinder innovation and entrepreneurship.
- Developing guidelines to bring crypto asset distributions back to the US, eliminating reliance on offshore structures and providing legal clarity for innovators.
- Evaluating the adaptation of the existing custody regime to accommodate crypto assets, including through exemptive relief and potential rule changes.

Atkins also stressed the importance of enabling "super-apps" that allow securities intermediaries to offer a wide range of services, including trading in crypto asset securities, non-security crypto assets, and traditional securities, under a single license. He directed SEC staff to develop guidance and proposals to support this model and to consider allowing certain non-security crypto assets to trade on non-registered venues.

The initiative also aims to integrate on-chain software systems into US securities markets, accommodating both fully decentralized and intermediary-operated systems. Atkins emphasized the need to protect pure publishers of software code and establish practical rules for intermediaries operating on-chain.

Atkins concluded by calling for a more flexible regulatory posture that prioritizes commercial viability. He proposed a new "innovation exemption" to allow novel business models and technologies to enter the market quickly, even if they do not fit neatly within existing SEC rules. This exemption would be principles-based, requiring compliance with core objectives of federal securities laws without imposing rigid or incompatible requirements.

The announcement of Project Crypto comes amidst a shift in the regulatory landscape, with the CFTC extending an olive branch to the SEC to support the success of Project Crypto. The CFTC has also announced its own initiative, "Crypto Sprint," to bring recommendations from the White House digital asset report into concrete action. This collaboration between the CFTC and the SEC is a significant step towards creating a unified regulatory framework for the crypto market in the US.

References:
[1] https://thecryptobasic.com/2025/08/04/cftc-announces-crypto-sprint-initiative-in-new-collaboration-with-sec/?utm_campaign=cftc-announces-crypto-sprint-initiative-in-new-collaboration-with-sec&utm_medium=rss&utm_source=rss
[2] https://www.wilmerhale.com/en/insights/client-alerts/20250801-sec-chair-atkins-unveils-project-crypto-to-modernize-us-securities-regulation