SEC Launches 'Project Crypto' to Modernize Crypto Regulation and Spur Innovation

The U.S. Securities and Exchange Commission (SEC) has launched a major regulatory initiative dubbed “Project Crypto,” signaling a significant shift in its approach to digital assets. Announced by SEC Chair Paul Atkins in a recent address, the project aims to modernize the agency’s regulatory framework to foster innovation in the crypto space while ensuring investor protection [1]. This move represents a sharp departure from the enforcement-heavy strategies of the previous administration and aligns with broader policy goals under the Trump administration to position the United States as a global leader in blockchain technology [2].

Atkins outlined several key priorities for the initiative, including the development of clear and simple rules for crypto activities such as custody, trading, and the operation of exchange-based “super-apps” that offer a range of financial services. He emphasized the importance of allowing companies to experiment with on-chain innovations, such as tokenizing equities and creating blockchain versions of traditional assets like stocks and money market funds [1]. This approach reflects a broader effort to modernize outdated securities laws and make U.S. markets more competitive in the evolving digital economy [2].

The timing of “Project Crypto” is notable, coming just days after the White House released a 166-page report outlining its own regulatory vision for the crypto industry. The report, produced by the President’s Working Group on Financial Markets, calls for a unified and consistent framework across agencies such as the SEC and CFTC. Atkins publicly endorsed the report’s recommendations, calling them a crucial step toward regulatory clarity and innovation [3]. The White House also urged regulators to expedite the development of rules for digital asset registration, custody, trading, and recordkeeping, emphasizing the need for swift action to keep pace with industry advancements [4].

Atkins’ leadership marks a clear break from the Gensler-era approach, during which the SEC pursued aggressive enforcement actions against major crypto firms like Coinbase and Gemini. That period was marked by high-profile collapses such as FTX, which led to calls for stricter oversight. However, the crypto industry responded by mobilizing significant political support, with blockchain-friendly candidates like Donald Trump gaining traction in the 2024 election. Trump’s election victory brought a wave of pro-crypto appointments, including Atkins, a former SEC commissioner with a long-standing advisory role in the industry [1].

Despite the optimism surrounding the new strategy, critics remain skeptical. Consumer advocacy groups like Better Markets have warned that a more hands-off approach could lead to a resurgence of fraud and instability. Dennis Kelleher, CEO of the organization, cited historical patterns when Atkins previously served as an SEC commissioner, arguing that the approach could favor politically connected firms over ordinary investors [5].

The SEC’s initiative is part of a broader regulatory landscape that has seen significant legislative progress, including the passage of the first-ever U.S. law to regulate stablecoins. The legislation is expected to facilitate the adoption of U.S. dollar-backed stablecoins in mainstream finance, though some lawmakers have raised concerns about potential conflicts of interest tied to Trump’s affiliations with certain crypto platforms [5].

As the SEC moves forward with “Project Crypto,” it faces the challenge of developing a regulatory framework that balances innovation with investor protection. This effort will unfold against the backdrop of ongoing congressional debates over comprehensive digital asset legislation. While the House has passed its own version of a bill, the Senate has yet to signal its stance, leaving room for further uncertainty [1].

The initiative is expected to play a central role in shaping the future of digital asset markets in the U.S., particularly as global competition in the crypto space intensifies. By fostering a regulatory environment that encourages innovation, the SEC aims to solidify America’s position as a global leader in blockchain technology and digital finance [6].

Sources:

[1] U.S. SEC Chairman Atkins Says Agency Pursuing 'Project Crypto' to Elevate Industry. CoinDesk. https://www.coindesk.com/policy/2025/07/31/u-s-sec-chairman-atkins-says-agency-pursuing-project-crypto-to-elevate-industry

[2] SEC Chair Unveils 'Project Crypto' To Back Trump's Push for US Crypto Dominance. Stocktwits. https://stocktwits.com/news-articles/markets/equity/sec-chair-unveils-project-crypto-to-back-trump-s-push-for-us-crypto-dominance/choLhyMRdG4

[3] SEC Chairman Paul S. Atkins supports the PWG's crypto policy proposals. Mitrade. https://www.mitrade.com/insights/news/live-news/article-3-1001461-20250731

[4] White House releases new crypto recommendations in landmark report. POLITICO. https://subscriber.politicopro.com/article/2025/07/white-house-to-release-new-crypto-recommendations-in-landmark-report-00484253

[5] The SEC just unveiled 'Project Crypto': What you need to know. Fortune. https://fortune.com/crypto/2025/07/31/jamie-dimon-jpmorgan-chase-bitcoin-stablecoins-blockchain/

[6] The SEC just unveiled 'Project Crypto': What you need to know. Fortune. https://fortune.com/crypto/2025/07/31/the-sec-just-unveiled-project-crypto-what-you-need-to-know/