The Securities and Exchange Commission (SEC) has announced a significant change to its digital asset regulation approach. Starting on July 31, Project Crypto is the committee’s response to the recommendations of the President’s Working Group (PWG).
The SEC is planning a nationwide regulatory overhaul of crypto assets
Chairman Atkins Confirmed The SEC will use current authorities to implement PWG recommendations. These include establishing federal rules on digital assets, redefining how encryption laws are applied, and supporting new laws from Congress. The SEC Cryptographic Task Force supports development and regulation.
Atkins said the committee will focus on creating clear, future look rules. These apply to crypto assets issuance, transaction and custody. The fresh rules are intended to support both innovation and investor protection. The SEC also develops exemptions and safe space structures designed for digital asset activities.
Atkins highlighted the need to work with other federal agencies, particularly the Commodity Futures Trading Commission (CFTC). He emphasized the need for a unified, consistent national approach to crypto surveillance. This reflects the White House’s attitude about coordinated regulations and the importance of removing regulatory uncertainty. The PWG Report calls for greater inter-ministerial cooperation. It identifies overlapping jurisdiction between the SEC and CFTC as issues and provides an overview of the roadmap for harmony. Atkins has committed to implementing this framework through consistent engagement with both the institution and other related departments.
SEC Chair rejects historical classifications of most cryptocurrencies as securities
Confirmed in a X post by Martyparty, Atkins has deviated from the views of former SEC chairman Gary Gensler. Gensler previously said that most cryptocurrencies are securities and are under SEC control. In contrast, Atkins said most crypto assets do not meet the securities standards as they pointed out the confusion surrounding the application of Howey Test as a key issue.
https://x.com/martypartymusic/status/1950982100527751220
According to Atkins, many crypto developers overtly treat assets as securities due to legal uncertainty. The SEC is currently planning to issue its own specifications to help market participants determine whether the token is eligible as a security or investment agreement. The new SEC policy includes revised essentials for token distribution, such as initial coin provision (ICO), airdrops, and network incentives. Through this, Atkins directed his staff to develop announcements and exemptions tailored to these activities. The goal is to ensure compliance without throttling innovation. These efforts aim to address general regulatory concerns while avoiding blanket restrictions.
Additionally, he also addressed investors’ rights, particularly regarding the independence of crypto assets. He has expressed support for individuals using independent wallets to retain and manage their digital assets. He confirmed the rights of users to engage in chain activities such as staking. However, the SEC also recognized that some investors would continue to rely on custody services. In such cases, registered broker dealers and investment advisors must meet additional regulatory requirements. These include custody, reporting, and client asset protection standards.
SEC supports the development of all-in-one cryptographic super apps
The agency signaled support for “super apps” combining a variety of crypto services under a single regulatory license. This includes platforms that allow trading on both securities and non-empirical terms, as well as lending and staking. Atkins pointed out that a single license should be sufficient, rather than asking for dozens of state-level permits.
According to the new framework, companies can offer digital securities trading along with traditional assets on the same platform. The aim of this approach is to reduce regulatory fragmentation and simplify the operation of the crypto business. The SEC will consider new rules to streamline licensing while maintaining investor protection.
Congress is currently working on the law to define cryptocurrency securities under the new law, but the SEC will not wait. Atkins confirmed that agencies will use current authorities to begin implementing reforms prior to Congress’ actions. This includes interpretive guidance, exemption relief, and the rulemaking process. The committee’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 would modify its approach as required by future legislative directions.
The launch of Project Crypto modernizes financial infrastructure
Project Crypto will lead committee-wide initiatives to adapt securities laws to blockchain infrastructure. The project includes token issuance, custody and drafting simple rules for transactions. These rules will be released for public comment before adoption. The goal is to move US financial markets to blockchain integration.
Atkins has instructed staff to remove regulatory barriers that limit technological advancements. He confirmed that older rules would not be enforced when preventing innovation and market participation. The SEC uses its discretion to allow current practices while maintaining its investor protection duties. Atkins tackled an ongoing debate over the legal treatment of cryptographic software developers. He supported clear legal boundaries protecting developers who publish code without acting as intermediaries.
Agents aim to draw a line between undismantled platforms and regulated entities. This is in the trial of Roman Storm, the developer of Tornado Cash. This case raised questions about the developer’s responsibility for open source software. Atkins is working on developing rules that distinguish code publications from intermediary services.
Returning a US-based crypto business is a key objective
One of Project Crypto’s goals is to bring back the US crypto business that has been transferred for past enforcement actions. Atkins said regulatory uncertainty and previous enforcement campaigns have driven innovators overseas. He nominated Operation Chokepoint 2.0 as one of the initiatives that caused disruption.
The SEC now works to create a stable environment for crypto companies to operate in the US, including restoring trust in the regulatory process and enabling companies to build within a predictable legal framework. Atkins confirmed that the effort coincides with President Trump’s orders to establish US domination in digital innovation. The SEC is taking the lead in Project Crypto, but Congress could boost CFTC with future laws.
The SEC acknowledged that some of the current responsibility may change as legislation develops. In the meantime, the SEC has confirmed that it will continue to be closely coordinated with the CFTC. The agency will work together to ensure a smooth transition in the event of changes in liability. Atkins reaffirmed the need for consistent regulatory oversight, regardless of which agency leads a particular field.
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