The U.S. Securities and Exchange Commission (SEC) announced a key change in its digital asset regulatory approach. Project Crypto, launched on July 31, is the commission’s response to the President’s Working Group (PWG) recommendations.
SEC Plans Nationwide Regulatory Overhaul for Crypto Assets
Chairman Atkins confirmed that the SEC will use its current authorities to implement the PWG’s recommendations. These include establishing federal rules for digital assets, redefining how securities laws apply to crypto, and supporting new legislation from Congress. The SEC’s Crypto Task Force will assist with development and regulation.
Atkins stated that the commission will focus on the creation of clear, forward-looking rules. These will apply to crypto asset issuance, trading, and custody. The fresh rules aim to support both innovation and investor protection. The SEC will also develop exemptions and safe space structures designed for digital asset activities.
Atkins stressed the need for cooperation with other federal agencies, particularly the Commodity Futures Trading Commission (CFTC). He stressed the need for a unified, consistent national approach to crypto oversight. This reflects the White House’s stance on coordinated regulation and the importance of removing regulatory uncertainty. The PWG report calls for expanded inter-agency cooperation. It identifies overlapping jurisdiction between the SEC and CFTC as a challenge and outlines a roadmap for harmonization. Atkins committed to implementing this framework through consistent engagement with both agencies and other relevant departments.
SEC Chair Rejects Past Classification of Most Cryptocurrencies as Securities
Confirmed via an X post by MartyParty, it has been revealed that Atkins has diverged from the views of former SEC Chairman Gary Gensler. Gensler previously stated that most cryptocurrencies are securities and fall under SEC control. In contrast, Atkins stated that most crypto assets do not meet the standards for securities as he pointed to confusion surrounding the application of the Howey Test as a key problem.
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According to Atkins, many crypto developers have treated assets as securities excessively due to legal uncertainty. The SEC now plans to issue unique specifications to help market participants determine whether a token qualifies as a security or investment contract. The SEC’s new policy includes revised necessities for token distributions such as initial coin offerings (ICOs), airdrops, and network incentives. Through this, Atkins has directed his staff to develop announcements and exemptions tailored to these activities. The goal is to ensure compliance without stifling innovation. These efforts aim to address common regulatory concerns while avoiding blanket restrictions.
Additionally, he also addressed investor rights, particularly regarding self-custody of crypto assets. He expressed support for individuals using self-custodial wallets to hold and manage their digital assets. He confirmed the right of users to engage in on-chain activities such as staking. However, the SEC also recognized that some investors will continue to rely on custodial services. For such cases, registered broker-dealers and investment advisers must meet additional regulatory requirements. These include standards for custody, reporting, and client asset protection.
SEC Supports Development of All-in-One Crypto Super-Apps
The agency signaled support for “super-apps” that combine various crypto services under a single regulatory license. This includes platforms that allow trading in both securities and non-securities, as well as lending and staking. Atkins noted that a single license should suffice rather than requiring dozens of state-level permits.
According to the new framework, firms could offer trading of digital securities alongside traditional assets on the same platform. The approach aims to reduce regulatory fragmentation and simplify operations for crypto businesses. The SEC will consider new rules to streamline licensing while maintaining investor protections.
Although Congress is currently working on legislation to define crypto securities under new laws, the SEC will not wait. Atkins confirmed that the agency will use its current authorities to begin implementing reforms ahead of congressional action. This includes interpretive guidance, exemptive relief, and rulemaking processes. The commission’s goal is to provide legal clarity to the crypto market in the short term. Atkins said the SEC will remain adaptable as new laws are passed. He confirmed that the agency will revise its approach as required by future congressional direction.
Launch of Project Crypto to Modernize Financial Infrastructure
Project Crypto will lead the commission-wide initiative to adapt securities laws to blockchain infrastructure. The project includes drafting simple rules for token issuance, custody, and trading. These rules will be released for public comment before adoption. The goal is to move U.S. financial markets toward blockchain integration.
Atkins instructed staff to remove regulatory barriers that limit technological advancement. He confirmed that older rules will not be enforced if they prevent innovation or market participation. The SEC will use discretion to allow modern practices while maintaining its investor protection mandate. Atkins addressed the ongoing debate over the legal treatment of software developers in crypto. He supported clear legal boundaries that protect developers who publish code without acting as intermediaries.
The agency aims to draw lines between disintermediated platforms and regulated entities. This comes amid the trial of Roman Storm, a developer of Tornado Cash. The case raised questions about developer liability for open-source software. Atkins committed to developing rules that distinguish code publication from intermediary services.
Return of U.S.-Based Crypto Businesses a Key Objective
One of the goals of Project Crypto is to attract back U.S. crypto businesses that relocated due to past enforcement actions. Atkins stated that regulatory uncertainty and previous enforcement campaigns had driven innovators overseas. He named Operation Chokepoint 2.0 as one of the initiatives that caused disruption.
The SEC will now work to create a stable environment for crypto firms to operate in the U.S. This includes restoring trust in regulatory processes and ensuring businesses can build within a predictable legal framework. Atkins confirmed this effort aligns with President Trump’s directive to establish U.S. dominance in digital innovation. Although the SEC is taking the lead under Project Crypto, Congress may elevate the CFTC in future legislation.
The SEC acknowledged that some of its current responsibilities may shift depending on legislative developments. In the meantime, the SEC confirmed it will continue coordinating closely with the CFTC. The agencies will work together to ensure a smooth transition if responsibilities change. Atkins reaffirmed the need for consistent regulatory oversight, regardless of which agency leads specific areas.
