SEC’s “Project Crypto” Unveiled as Paul Atkins Declares Most Crypto Assets Are Not Securities

Atkins Outlines Framework to Modernize Securities Rules for On-Chain Finance
SEC Chair Paul Atkins has unveiled “Project Crypto,” a commission-wide initiative to update securities regulations for the digital finance era. Announced on July 31 at the America First Policy Institute in Washington, D.C., the plan follows recommendations from the White House’s President’s Working Group report issued the previous day. Atkins said the goal is to position the U.S. as a global leader in crypto regulation while ensuring the framework adapts to blockchain technology.
The project will focus on drafting clear rules for crypto asset distributions, custody, and trading. While final regulations are in development, the SEC intends to use interpretative, exemptive, and other authorities to prevent outdated rules from stifling innovation. Atkins departed sharply from his predecessor’s approach, stating that most crypto assets are not securities despite years of ambiguity over the Howey test. He committed to offering guidance to help market participants classify assets accurately, with tailored disclosure and exemption pathways for offerings such as ICOs, airdrops, and network rewards.
The plan aligns with President Donald Trump’s stated goal of creating a “golden age” for U.S. digital assets, with Atkins pledging to attract back crypto businesses that relocated overseas under previous enforcement-heavy policies. He cited “Operation Chokepoint 2.0” as a key factor behind the industry’s earlier exodus. Among the proposed reforms is a single licensing regime enabling broker-dealers to handle non-security crypto, crypto securities, and traditional securities—along with services like staking and lending—without navigating dozens of separate state or federal licenses.
Atkins endorsed the rise of integrated financial “super-apps” and called for a clear market division between commodities and securities, with the CFTC assuming sole oversight of spot crypto markets. Joint supervision between the SEC and CFTC would apply elsewhere, in line with White House recommendations. Safe harbors are also under consideration for early-stage projects, ICOs, and decentralized software initiatives, giving developers space to innovate without immediate legal challenges.
On custody, Atkins affirmed the right of individuals to hold assets in self-custodial wallets, while acknowledging the ongoing role of SEC-registered brokers and advisers for those who prefer institutional services. He stressed the importance of drawing clear lines between intermediated and disintermediated activity, pledging rational regulatory treatment for developers—an issue underscored by the ongoing Tornado Cash case involving Roman Storm.
Under Atkins, the SEC has moved away from regulation by enforcement. His tenure has included the approval of multiple crypto ETFs, including in-kind creation and redemption mechanisms for institutional efficiency, as well as formal guidance in May that staking income from proof-of-stake networks does not constitute a securities transaction. Project Crypto is the agency’s direct implementation of the White House’s July 30 recommendations, which emphasized market structure clarity, interagency coordination, stablecoin policy, updated banking rules, and measures to counter illicit finance.
This article has been refined and enhanced by ChatGPT.