In a move to modernize the regulatory landscape for cryptocurrencies and blockchain-based markets, the U.S. Securities and Exchange Commission (SEC) unveiled Project Crypto on July 31, 2025.
Streamlining regulations and oversight
Spearheaded by SEC Chair Paul Atkins, the initiative seeks to overhaul existing securities regulations that no longer fit the realities of on-chain finance, aiming to position the United States as a global leader in digital asset innovation and market integrity.
The project follows recent White House guidance urging federal agencies to streamline digital asset oversight and reduce legal uncertainty. Project Crypto promises clearer rules on token classifications, streamlined licensing procedures for brokerages, and protections for self-custody of digital assets.
Enhanced coordination
Additionally, it calls for enhanced coordination between the SEC and the Commodity Futures Trading Commission (CFTC) to align regulatory approaches across the rapidly evolving crypto ecosystem.
By moving away from a heavy-handed enforcement approach, the SEC aims to foster innovation and growth while safeguarding investors, signaling a new era of proactive, innovation-friendly crypto regulation in the U.S.
Key Highlights
- Regulatory Modernization: Project Crypto seeks to overhaul the SEC’s rules to fit the realities of 21st-century, on-chain finance. Legacy regulations, originally crafted for traditional intermediated markets, are being updated to remove barriers to blockchain innovation and competition.
- Response to White House Guidance: The initiative directly follows recommendations from the President’s Working Group on Digital Asset Markets and dovetails with the White House’s call for federal agencies to facilitate the trading and innovation of digital assets at the federal level.
- Clear Market Structure: Atkins proposes clarifying the regulatory distinction between crypto-assets that qualify as securities and those considered commodities. The SEC will define clear “rules of the road” for token issuances, custody, and trading to support safe capital formation and investor opportunity in crypto markets.
- Licensing and Innovation Exemptions: The plan recommends easing licensing rules—allowing brokerages to offer various asset classes under a single license. It also suggests creating “innovation” exemptions or grace periods for early-stage crypto projects and decentralized applications, so they can grow without immediate fear of legal reprisals.
- Collaboration with the CFTC: There is an emphasis on deeper collaboration between the SEC and the Commodity Futures Trading Commission (CFTC) to ensure assets classified as commodities (which cover most cryptocurrencies per Atkins) are regulated appropriately without hampering growth or necessitating multiple federal or state licenses.
- Self-Custody Protections: Project Crypto intends to enshrine the right of Americans to self-custody their digital assets in law, reflecting a fundamental aspect of crypto’s technological promise.
- Rolling Back Prior Enforcement: The SEC under Atkins signaled a break from the previous administration’s “regulation by enforcement,” aiming instead for proactive, innovation-forward rulemaking that welcomes both incumbents and new entrants back onshore.
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