Introduction
In a significant policy address on July 31, 2025, at the America First Policy Institute in Washington, D.C., Securities and Exchange Commission (SEC) Chairman Paul Atkins introduced “Project Crypto.” This comprehensive, agency-wide initiative seeks to modernize securities regulations, aligning with President Trump’s ambition for the United States to become a global hub for cryptocurrency innovation. Atkins emphasized the pivotal opportunity for American leadership in the evolving landscape of digital finance. He detailed a regulatory strategy focused on integrating blockchain-based software systems into American markets, fostering decentralized finance (DeFi), and introducing a novel “innovation waiver” to accelerate the deployment of cutting-edge technologies. His comments indicate a notable shift toward a more adaptable regulatory stance, which could substantially influence the future of the digital asset market in the U.S.
Establishing American Dominance in Digital Finance
To solidify the United States’ position as a leader in the digital finance revolution, Chairman Atkins presented Project Crypto as a broad SEC undertaking. The goal is to update securities rules and regulations to enable the smooth integration of financial markets with blockchain technology. Atkins drew attention to the GENIUS Act, current Congressional efforts to legislate market structures, and described the President’s Working Group on Digital Asset Markets (PWG) Report as a “blueprint” for establishing the United States at the forefront of blockchain and crypto technology. Rejecting the previous “regulation-by-enforcement” methods, Atkins pledged to incentivize the return of crypto businesses to the U.S. and instructed SEC staff to:
- Create clear regulatory guidelines for the distribution, storage, and trading of crypto assets, open to public review and feedback.
- Work collaboratively with the Crypto Task Force to efficiently develop rule proposals that are consistent with the PWG Report’s recommendations.
- Explore the utilization of interpretative, exemptive, and alternative mechanisms to ensure that outdated regulations do not impede innovation and entrepreneurship within the United States.
Attracting Crypto Asset Distributions Back to the U.S.
Chairman Atkins stated that he has directed SEC personnel to formulate a complete regulatory structure to bring crypto asset distribution activities back to the U.S., reducing dependence on offshore operations and providing clear legal guidance for innovators. Specifically, he directed SEC staff to:
- Develop clear guidelines for classifying crypto assets as either securities or subject to an investment contract.
- Suggest appropriate disclosure requirements, exemptions, and safe harbor provisions for crypto asset securities, including initial coin offerings (ICOs), airdrops, and network rewards.
- Engage directly with businesses seeking to tokenize conventional securities to facilitate their offering within U.S. markets.
Atkins underlined his belief that the majority of crypto assets are not securities and that such classification should not discourage innovation. He expressed support for crypto asset securities that include features like voting rights and dividends. He also dismissed the need for premature decentralization or offshore setups, instead promoting a regulatory climate that encourages innovation and includes American investors.
Promoting Custodian and Trading Venue Diversity
Chairman Atkins emphasized the importance of offering market participants “maximum choice” in how they manage and trade crypto assets. He reiterated his strong support for self-custody, labeling it a “fundamental American principle,” while acknowledging that many investors will continue to rely on SEC-registered entities such as broker-dealers and investment advisors.
To address this issue and implement the PWG Report’s recommendation to modernize the SEC’s custody rules, Atkins instructed SEC staff to analyze how the existing custody regulations can be adapted to accommodate crypto assets. This includes exploring exemptive relief and potential rule modifications. He also advocated for allowing market participants to operate across multiple business areas under the most streamlined licensing structure possible. Furthermore, he conveyed his support for regulatory flexibility that protects investors without placing unnecessary burdens.
Enabling Horizontal Integration of Product Offerings
Chairman Atkins identified enabling “super-apps” as a primary objective of his leadership. He defined these platforms as allowing securities intermediaries to provide a broad array of services—including trading in crypto asset securities, non-security crypto assets, crypto services (like asset “staking”), and traditional securities—under a unified license. He stated that federal securities laws currently do not prevent SEC-registered venues from listing non-securities. Consequently, Atkins directed SEC staff to:
- Create guidance and proposals that foster the super-app model.
- Develop a framework permitting the side-by-side trading of crypto asset securities and non-security crypto assets on SEC-regulated platforms.
- Assess the use of Commission authority to allow some non-security crypto assets to be traded on unregistered venues, including state-licensed and CFTC-regulated platforms.
Atkins also urged the SEC and other regulatory bodies, consistent with the PWG Report, to simplify licensing procedures and avoid redundant regulatory requirements, emphasizing the importance of regulatory efficiency and competition.
Integrating Blockchain Systems into Securities Markets
Chairman Atkins directed SEC staff to update outdated rules and regulations to support the integration of blockchain software systems into U.S. securities markets. He explained that these systems exhibit diverse structures—some are entirely decentralized and function without intermediaries, while others have identifiable operators. He emphasized that both models should be accommodated within the regulatory framework. Atkins highlighted the significance of enabling decentralized systems, such as automated market makers, which facilitate financial activity without intermediaries. He noted that while federal securities laws traditionally assume the existence of intermediaries, regulation should not mandate intermediaries where markets can operate effectively without them.
Atkins further stated that the SEC will focus on safeguarding pure publishers of software code, clarifying the distinction between intermediated and disintermediated activity, and establishing practical rules for intermediaries operating on-chain. These systems, he asserted, should not be hindered by overlapping or unnecessary regulation. Atkins acknowledged that realizing this vision may require rule modifications, potentially including revisions to Regulation NMS to accommodate the trading of tokenized securities.1
Prioritizing Commercial Viability as a Key Principle
In closing, Chairman Atkins advocated for a more adaptable regulatory approach that prioritizes commercial viability. He proposed a new “innovation waiver” to expedite the entry of innovative business models and technologies into the market, even if they do not perfectly align with existing SEC rules. This waiver would be principles-based, requiring adherence to the core objectives of federal securities laws without imposing inflexible or incompatible requirements.
Atkins suggested that conditions under the exemption could include periodic reporting, the use of whitelisting or “verified pool” functionality—restricting transactions to pre-approved, compliant participants—and limitations on tokenized securities that do not comply with standards like ERC-3643, which incorporates features such as identity verification and transfer restrictions. He stressed that SEC staff and market participants should assess new models with a focus on practical implementation and market readiness.
Conclusion
Chairman Atkins’s address represents a significant evolution in the SEC’s approach to digital assets. With the launch of “Project Crypto,” the Commission is progressing towards a proactive regulatory framework designed to position the United States as a global leader in blockchain finance. Although guidance, rulemaking, and the “innovation waiver” are still in development, a clear federal pathway for the blockchain industry is emerging. Market participants should actively monitor key developments (including the GENIUS Act, the PWG Report, and market structure legislation), consider engaging directly with the Crypto Task Force, and re-evaluate their business structure, products, and compliance programs to prepare for this evolving regulatory landscape.2