SEC Chairman Paul Atkins has announced the "Crypto Project", a major initiative to modernize securities regulations so that the U.S. capital market can operate on blockchain.
This is the most powerful regulatory transformation that the SEC has ever implemented to promote innovation in the cryptocurrency field. It follows the GENIUS Act of President Trump and the Presidential Working Group (PWG) report.
What is the SEC's Crypto Project?
The "Crypto Project" is a comprehensive reform of the Commission's securities regulations to:
- Activate blockchain-based (on-chain) markets.
- Clarify legal rules for issuing, trading, and custody of cryptoassets.
- Prevent innovation from being pushed overseas.
- Replace outdated 20th-century rules with blockchain-compatible policies.
According to the statement, Atkins is requesting interpretive guidance, exemptions, and short-term safety measures. This will allow web3 innovation to continue while new rules are being drafted.
Moreover, the SEC intends to allow tokenized securities, such as stocks, bonds, and partnership interests, to be issued and traded on public blockchains.
This will enable companies to raise capital directly through blockchain-based offerings.
Most importantly, this includes initial coin offerings (ICOs), airdrops, and network rewards—without the need for foreign entities or complex solutions.
Custody rules will also be updated to support blockchain-based payment and storage, removing barriers to the use of smart contracts and decentralized infrastructure.
The Commission will propose new rules to tokenize traditional assets.
In summary, the SEC is replacing regulations with clear guidance and written rules. This means no more "red flags" for cryptocurrency projects issued as securities.
Overall, developers can now participate without fear of being sued just for building. Clear tests will help determine whether a cryptoasset is a security, moving away from the vague dependence on the Howey Test.
