Introduction
On July 31, 2025, SEC Chairman Paul Atkins delivered a major policy address at the America First Policy Institute in Washington, D.C., unveiling "Project Crypto"—a Commission-wide initiative to modernize securities regulation in support of President Trump's vision of the United States as the "crypto capital of the world." Framing the moment as a defining opportunity for American leadership in digital finance, Atkins outlined a regulatory agenda focused on integrating "on-chain" (on blockchain technology) software systems into US markets, enabling decentralized finance, and launching a new "innovation exemption" to accelerate the commercial deployment of novel technologies. His remarks signal a significant shift toward a more flexible regulatory posture that could shape the future of the US digital asset market for years to come.
American Leadership in the Age of Digital Finance
To secure US leadership in the digital finance era, Atkins unveiled Project Crypto as a Commission-wide initiative to modernize securities rules and regulations to enable America's financial markets to move on-chain. Atkins highlighted the GENIUS Act and Congress's ongoing efforts to pass market structure legislation and described the President's Working Group on Digital Asset Markets (PWG) Report as "the blueprint to make America first in blockchain and crypto technology." Rejecting the prior "regulation-by-enforcement" approach, Atkins committed to reshoring crypto businesses and directed Commission staff to:
- Draft clear rules for the distribution, custody, and trading of crypto assets, subject to public notice and comment.
- Collaborate with the Crypto Task Force to swiftly develop rule proposals aligned with the PWG Report's recommendations.
- Consider using interpretative, exemptive and other authorities to ensure that outdated rules do not hinder innovation and entrepreneurship in America.
Encouraging Crypto Asset Distributions to Return to the US
Atkins announced that he has directed SEC staff to develop a comprehensive regulatory framework to bring crypto asset distributions back to the US in order to eliminate reliance on offshore structures and provide legal clarity for innovators. Specifically, he said he instructed SEC staff to:
- Draft clear guidelines for determining whether a crypto asset is a security or subject to an investment contract.
- Propose tailored disclosures, exemptions, and safe harbor mechanisms for crypto asset securities, including initial coin offerings, airdrops, and network rewards.
- Work directly with firms seeking to tokenize traditional securities to facilitate their distribution within US markets.
Atkins emphasized his view that most crypto assets are not securities and that being classified as a security should not be a deterrent to development. He expressed support for crypto asset securities that offer features like voting rights and distributions. Atkins also rejected the need for premature decentralization or offshore structuring and advocated instead for a regulatory environment that encourages innovation and includes American investors.
Choice Among Custodians and Trading Venues
Atkins stressed that market participants must have "maximum choice" in how they custody and trade crypto assets. He reaffirmed his strong support for self-custody, calling it a "core American value," while recognizing that many investors will continue to rely on SEC-registered intermediaries like broker-dealers and investment advisers.
To address this and implement the PWG Report's recommendation to modernize the SEC's custody rules, Atkins directed SEC staff to evaluate how to adapt the existing custody regime to accommodate crypto assets, including through exemptive relief and potential rule changes. He also called for allowing market participants to operate across multiple business lines under the most efficient licensing structure possible and expressed support for regulatory flexibility that protects investors without imposing unnecessary burdens.
Horizontal Integration of Product Offerings
Atkins identified enabling "super-apps" as a key priority of his chairmanship. He defined them as platforms that allow securities intermediaries to offer a wide range of services—including trading in crypto asset securities, non-security crypto assets, crypto services (such as asset "staking"), and traditional securities—under a single license. He asserted that the federal securities laws do not prohibit SEC-registered venues from listing non-securities today. Accordingly, Atkins directed SEC staff to:
- Develop guidance and proposals to support the super-app model.
- Develop a framework allowing side-by-side trading of crypto asset securities and non-security crypto assets on SEC-regulated platforms.
- Evaluate the use of Commission authority to permit certain non-security crypto assets to trade on non-registered venues, including state-licensed and CFTC-regulated platforms.
Atkins also called on the SEC and other regulators, consistent with the PWG Report, to streamline licensing structures and avoid duplicative regulatory burdens, emphasizing the importance of regulatory efficiency and competition.
Integrating On-Chain Systems in Securities Markets
Atkins directed SEC staff to update outdated rules and regulations to support the integration of on-chain software systems into US securities markets. He explained that these systems vary in structure—some are fully decentralized and operate without intermediaries, while others have identifiable operators. Both models, he emphasized, should be accommodated within the regulatory framework. Atkins stressed the importance of enabling decentralized systems, such as automated market makers, which facilitate non-intermediated financial activity. He noted that while federal securities laws have traditionally assumed the presence of intermediaries, regulation should not impose intermediaries where markets can function without them.
Atkins also stated that the SEC will work to protect pure publishers of software code, clarify the distinction between intermediated and disintermediated activity, and establish practical rules for intermediaries operating on-chain. These systems, he said, should not be stifled by duplicative or unnecessary regulation. Atkins acknowledged that to implement this vision, rule changes may be necessary, including potential amendments to Regulation NMS to accommodate tokenized securities trading.1
Commercial Viability as the Guiding Principle
Atkins concluded by calling for a more flexible regulatory posture that prioritizes commercial viability. He proposed a new "innovation exemption" to allow novel business models and technologies to enter the market quickly, even if they don't fit neatly within existing SEC rules. This exemption would be principles-based, requiring compliance with core objectives of federal securities laws without imposing rigid or incompatible requirements.
Atkins suggested that conditions under the exemption could include periodic reporting, use of whitelisting or "verified pool" functionality—which restrict transactions to pre-approved, compliant participants—and limitations on tokenized securities that do not comply with standards like ERC-3643, which embeds features such as identity verification and transfer restrictions. He emphasized that both SEC staff and market participants should evaluate new models with an eye toward practical implementation and market readiness.
Conclusion
Atkins's speech marks a major shift in the SEC's approach to digital assets. With the launch of "Project Crypto," the Commission is moving toward a proactive regulatory framework aimed at making the US a global leader in blockchain finance. While guidance, rulemaking and the "innovation exemption" are still underway, a federal pathway for the blockchain industry is becoming apparent. 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 review their business structure, products, and compliance programs to position themselves for this new regulatory framework.2
Footnotes
1. Atkins separately addressed questions about Regulation NMS and whether amendments may be necessary to address its application in the traditional securities markets. See SEC Announces Roundtable on Trade-Through Prohibitions (July 21, 2025), https://www.sec.gov/newsroom/press-releases/2025-99-sec-announces-roundtable-trade-through-prohibitions.
2. In addition to the contributors listed below, Michael Sise, Cole Steinberg, and Sofia Schonenberg also provided valuable support in the review and drafting process.
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