- The SEC’s Project Crypto aims to modernise outdated regulations and simplify licensing for crypto-native financial platforms.
- Paul Atkins supports exemptions and grace periods for decentralised projects and ICOs to encourage early innovation.
- The initiative promotes super apps and reaffirms users’ rights to self-custody, signalling a major regulatory shift.
The US Securities and Exchange Commission (SEC) has announced “Project Crypto,” an initiative led by Chair Paul Atkins to modernise financial regulations and foster innovation in digital assets. Rooted in recommendations from the President’s Working Group on Digital Assets, the initiative aims to update decades-old rules and streamline licensing requirements for crypto firms.
Atkins proposed that brokers should be permitted to offer a range of asset classes under a single licence and called for distinct classifications to separate crypto commodities from securities.
He emphasised that new crypto ventures, including decentralised protocols and initial coin offerings, should be granted regulatory exemptions or grace periods to encourage development without immediate legal pressure.
He rejected the notion that projects must form decentralised autonomous organisations to avoid regulation, and strongly defended the legal right to self-custody digital assets.
Related: SEC Greenlights In-Kind Redemptions and Spot Crypto ETPs in Major Market Shift
A Pro-Innovation Shift
The SEC staff has been tasked with crafting clear rules on asset classification and exploring exemptions for token distributions, airdrops, and network incentives. Atkins emphasised the need to prevent outdated frameworks from stifling blockchain systems that operate without middlemen.
[The SEC] will make sure that archaic rules and regulations do not smother innovation and entrepreneurship in America. Many of the Commission’s legacy rules and regulations do not make sense in the twenty-first century – let alone for on-chain markets.
Atkins’ vision also includes support for “super apps” that can integrate trading, staking, lending, and custody services within a single platform under one regulatory licence. He stated that legacy frameworks must be overhauled to suit blockchain-native markets, allowing innovation to thrive without forced intermediation.
“Project Crypto” signals a strategic move to bring digital finance onshore and position the US as a global crypto leader. It reflects the SEC’s broader pivot under Atkins, which has included approving crypto ETFs and clarifying that staking income on proof-of-stake networks is not a securities transaction.
Related: Senate Banking Committee Convenes Crypto Power Panel Ahead of Landmark Regulation Vote
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