At a pivotal moment for digital asset regulation, U.S. Securities and Exchange Commission (SEC) Chairman Paul S. Atkins has announced Project Crypto, a Commission-wide effort to modernize securities regulation and transition U.S. markets to an on-chain infrastructure.
“We are at the threshold of a new era in the history of our markets,” said Atkins, speaking at the America First Policy Institute’s event, “American Leadership in the Digital Finance Revolution,” on Thursday, July 31.
“Our regulatory framework need not be anchored to an analog past—unkind to new frontiers,” he stressed.
Positioning Project Crypto as a direct response to what he described as years of regulatory stagnation, Atkins made it clear the U.S. must lead—not follow—in shaping the future of financial markets.
“The world is not waiting. America must do more than just keep pace with the digital asset revolution. We must drive it,” SEC Chair said.
He credited President Trump’s signing of the GENIUS Act, establishing a federal framework for stablecoins, and applauded bipartisan momentum in Congress toward broader crypto market structure legislation.
Atkins also endorsed the newly released President’s Working Group (PWG) Report on Digital Asset Markets, calling it a “blueprint to make America first in blockchain and crypto technology.” The report, he said, would guide regulatory action in the months ahead.
Atkins laid out a series of immediate priorities that Project Crypto will pursue as the SEC undertakes what he described as a generational regulatory transformation.
First, he stressed the importance of bringing crypto asset distributions back onshore. According to Atkins, the SEC will issue clear guidance to help market participants determine whether a digital asset qualifies as a security, a commodity, or another classification, aiming to reduce the longstanding ambiguity surrounding the application of the Howey test. “The days of convoluted offshore corporate structures, decentralization theater, and confusion over security status, are over,” he said. “Our goal is to help market participants slot crypto assets into categories… and assess the economic realities of a transaction.”
To support this clarity, the Commission plans to develop tailored disclosure regimes, exemptions, and safe harbors for token distributions, including initial coin offerings, airdrops, and network rewards. Atkins emphasized that the intent is to eliminate the incentive for issuers to avoid U.S. investors altogether: “Issuers no longer exclude Americans from their distributions to avoid legal complexity and lawsuits.”
A second area of focus is custody and trading venue reform, where Atkins framed the issue as a matter of investor rights and market freedom. “The right to have self-custody of one’s private property is a core American value,” he said, adding that while some investors will choose self-custody, others will continue to rely on intermediaries such as broker-dealers and investment advisers.
To address these needs, Atkins pledged that the SEC will modernize its custody framework to reflect the realities of crypto markets. He criticized past policies, including Staff Accounting Bulletin 121 and what he referred to as “Operation Chokepoint 2.0,” for creating a hostile environment that drove custodial services offshore and narrowed market access.
Atkins also called for a rethinking of how digital financial services are licensed and regulated. He advocated for a unified licensing regime that would allow firms to offer broad-based digital financial services—sometimes called “super-apps”—under a single regulatory structure. These services could include trading in both security and non-security crypto assets, staking, lending, and more.
“Nothing in the federal securities laws prohibits SEC-registered trading venues from listing non-securities on their platforms today,” he noted. But he cautioned that overlapping or duplicative regulatory frameworks have created inefficiencies that “favor the largest firms that are better able to bear the regulatory burdens.”
In a nod to the evolving technological architecture of finance, Atkins addressed the role of on-chain software systems, including decentralized finance protocols. He emphasized the need for a regulatory model that recognizes both intermediated and disintermediated activity, allowing space for automated, non-custodial platforms to operate within U.S. capital markets.
“Federal securities laws have always assumed the involvement of intermediaries… but this does not mean that we should interpose intermediaries for the sake of forcing intermediation,” he said. Atkins also signaled that the Commission may need to amend Regulation NMS to accommodate tokenized securities trading on-chain, which he argued is currently inhibited by outdated, overly prescriptive rules. He called for a return to Congress’s original vision of letting “competitive forces, rather than unnecessary regulation, guide the development of the national market system.”
Finally, Atkins introduced the concept of an “innovation exemption”—a regulatory fast lane designed to allow firms to launch new technologies and business models without being bogged down by incompatible or rigid legacy requirements. This exemption, he explained, would be rooted in principles-based compliance aligned with the goals of investor protection. “Under my leadership, the Commission will encourage our nation’s builders rather than constrain them with red tape and one-size-fits-all rules.”
Chairman Atkins encouraged market participants to prepare for coming proposals and participate in the comment process. He confirmed that Commission staff have already been directed to begin drafting rules aligned with the PWG Report.
He pledged that the SEC, under his direction, would not “watch from the sidelines.”
“We will lead. We will build. And we will ensure that the next chapter of financial innovation is written right here in America,” he said.
