SEC Launches ‘Project Crypto’ to Modernize U.S. Digital Asset Regulations
The U.S. Securities and Exchange Commission (SEC) has launched “Project Crypto”, a new initiative aimed at updating the agency’s regulatory framework to better align with the realities of 21st-century finance. The announcement follows policy recommendations issued in a recent White House report on digital assets.
SEC Chair Paul Atkins said the initiative is designed to create a more modern, transparent, and innovation-friendly regulatory environment for cryptocurrencies and blockchain-based financial products. Project Crypto will also work to establish a clearer distinction between securities and commodities in the crypto space — a long-standing area of regulatory ambiguity.
A Response to the White House’s Digital Finance Push
Atkins confirmed that the initiative was formed in direct response to recommendations in the July report by the President’s Working Group on Digital Assets, titled “Strengthening American Leadership in Digital Financial Technology.”
Key proposals from the SEC under Project Crypto include:
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Streamlined licensing: Allowing brokerages to offer multiple asset classes under a single license.
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Clear market structure: Defining the line between securities and commodities in digital finance.
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Regulatory flexibility: Introducing grace periods or exemptions for early-stage crypto projects, including initial coin offerings (ICOs) and decentralized applications, to support innovation without immediate enforcement pressure.
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Self-custody protections: Ensuring the legal right for individuals and entities to hold their own digital assets.
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DAO neutrality: Avoiding pressure on crypto businesses to form decentralized autonomous organizations (DAOs) solely to escape regulation.
“Many of the Commission’s legacy rules and regulations do not make sense in the 21st century — let alone for on-chain markets,” Atkins said in a statement. “The Commission must revamp its rulebook so that regulatory moats do not hinder progress and competition, from both new entrants and incumbents, to the detriment of Main Street.”
Regulatory Shift Under Atkins
Since taking the helm of the SEC, Atkins has led a noticeable shift in the agency’s crypto posture. Under his leadership, the SEC has moved away from “regulation by enforcement” and toward clearer guidance for the industry.
In May 2025, the agency issued new guidance stating that staking rewards on proof-of-stake blockchains do not count as securities transactions — a major clarification for validators and network participants.
In July, the SEC approved in-kind creations and redemptions for crypto ETFs, a move welcomed by institutional investors seeking greater flexibility in how they manage fund inflows and outflows.
Growing Federal Coordination
The White House’s digital asset roadmap calls for closer coordination between agencies. Under the proposed framework, the SEC and Commodity Futures Trading Commission (CFTC) will share joint oversight of the crypto sector. The CFTC would take primary responsibility for spot markets, while the SEC would oversee crypto assets classified as securities.
Other priorities in the White House report include regulating stablecoins, strengthening anti-money laundering rules, updating tax policy for digital assets, and promoting U.S. leadership in financial innovation.
With Project Crypto now underway, the SEC appears to be taking concrete steps to align its policies with the rapidly evolving digital asset landscape — and to provide long-awaited clarity for the industry.
Featured image from: cointelegraph.com