Nikolas Sargeant
Securities and Exchange Commission Chair Paul Atkins has unveiled "Project Crypto," an ambitious initiative designed to modernize the agency's approach to digital finance and establish comprehensive regulations for digital assets in the United States. The announcement represents a significant shift in the SEC's stance toward cryptocurrency regulation, moving away from the previous administration's enforcement-heavy approach toward creating clear regulatory frameworks that foster innovation while protecting investors.
The Project Crypto initiative directly responds to recommendations from the President's Working Group on Digital Assets, focusing on several key areas of reform. Atkins proposed easing licensing requirements to allow brokerages to offer multiple asset classes under single licenses, while creating distinct market structures that separate commodities from securities. The plan also calls for regulatory exemptions and grace periods for early-stage crypto projects, initial coin offerings, and decentralized software, giving innovators space to develop without fear of regulatory reprisal.
Under the new framework, the SEC aims to protect fundamental rights including self-custody of digital assets, while ensuring that crypto businesses aren't forced to establish decentralized autonomous organizations solely to avoid regulation. Atkins emphasized that many of the Commission's legacy rules don't align with twenty-first century finance, particularly for on-chain markets, stating that regulatory barriers shouldn't hinder progress and competition to the detriment of everyday investors.
This regulatory shift has already begun materializing under Atkins' leadership, with the SEC ending its "regulation by enforcement" approach and approving several crypto exchange-traded fund applications. The agency has also provided guidance clarifying that staking rewards don't constitute securities transactions and approved in-kind creations and redemptions for crypto ETFs. According to the White House report that influenced Project Crypto, the SEC and CFTC will share joint oversight of the crypto industry, with the CFTC maintaining sole authority over spot cryptocurrency markets.
