July 31, 2025 - In a landmark speech today, Securities and Exchange Commission (SEC) Chairman Paul S. Atkins unveiled an ambitious initiative that could fundamentally reshape America's approach to cryptocurrency regulation. Speaking at the America First Policy Institute, Chairman Atkins announced the launch of "Project Crypto," a Commission-wide effort to modernize securities rules and position the United States as the undisputed "crypto capital of the world."
From Regulation by Enforcement to Innovation Leadership
The announcement marks a dramatic shift from the previous administration's approach, which Chairman Atkins characterized as "regulation-by-enforcement" and "Operation Chokepoint 2.0." Under the new framework, the SEC aims to create clear, business-friendly regulations that will bring crypto businesses back to American shores.
"The days of convoluted offshore corporate structures, decentralization theater, and confusion over security status, are over," Atkins declared. "President Trump has said that America is in its Golden Age—and under our new agenda, our crypto asset economy will be, too."
The Five Pillars of Project Crypto
Chairman Atkins outlined five key areas where the SEC will focus its regulatory modernization efforts:
1. Bringing Crypto Asset Distributions Back to America
The SEC will establish a clear regulatory framework for crypto asset distributions within the United States. This includes:
- Clear guidelines to help market participants determine whether a crypto asset qualifies as a security
- Purpose-built disclosure requirements and exemptions for initial coin offerings (ICOs), airdrops, and network rewards
- Accommodating regulatory pathways for projects that choose to operate as securities
"It should not be a scarlet letter to be deemed a security," Atkins emphasized, noting that many issuers will prefer the flexibility and investor protections that securities laws provide.
2. Expanding Custody and Trading Options
The initiative will modernize custody requirements for registered intermediaries while preserving Americans' right to self-custody their digital assets. Chairman Atkins stressed that "the right to have self-custody of one's private property is a core American value."
The SEC plans to:
- Update existing custody rules that were created without crypto assets in mind
- Provide exemptive relief where appropriate
- Allow market participants to choose the most efficient regulatory framework for their business
3. Enabling "Super-Apps" Through Horizontal Integration
Perhaps one of the most innovative aspects of Project Crypto is the concept of "super-apps"—allowing securities intermediaries to offer a broad range of products and services under a single license.
"A broker-dealer with an alternative trading system should be able to offer trading in non-security crypto assets alongside crypto asset securities, traditional securities, and other services, like crypto asset staking and lending, without requiring fifty-plus state licenses or multiple federal licenses," Atkins explained.
This approach aims to reduce regulatory burden while increasing competition and innovation in the market.
4. Unleashing On-Chain Software Systems
The SEC will update its rules to accommodate both centralized and decentralized on-chain software systems. This includes creating space for:
- Truly decentralized systems that operate without intermediaries
- Systems with operators that still function on-chain
- Automated market makers and other decentralized finance (DeFi) protocols
Chairman Atkins noted that federal securities laws have traditionally assumed intermediary involvement, but acknowledged that markets can function effectively without them in certain contexts.
5. Fostering Innovation Through Commercial Viability
The final pillar involves creating an innovation exemption that would allow both registered and non-registered entities to quickly bring new business models to market. Under this framework, innovators could enter the market with new technologies without being constrained by incompatible regulatory requirements.
Instead of prescriptive rules, companies would comply with principles-based conditions designed to achieve core policy aims of federal securities laws, such as periodic reporting and incorporating compliance features into tokenized securities.
Tokenization: The Future of Traditional Assets
A significant portion of Chairman Atkins' vision involves the tokenization of traditional securities—putting stocks, bonds, and other assets on blockchain networks. He noted that many firms, "from household names on Wall Street to unicorn tech companies in Silicon Valley—are lined up at our doors with requests to tokenize."
The regulatory framework will accommodate firms seeking to tokenize both their own securities and those of third parties, bringing much of this innovation back from offshore markets to the United States. For those interested in learning more about asset tokenization, this comprehensive guide provides valuable insights into the technology and its applications.
Historical Context and Market Evolution
Chairman Atkins drew parallels between today's crypto revolution and previous market innovations, from the original Buttonwood Agreement that established the New York Stock Exchange to the development of electronic trading systems in the 1990s. He particularly highlighted how the SEC helped resolve the "Paperwork Crisis" of the 1960s by facilitating the creation of electronic settlement systems.
"From the leaves of a buttonwood tree to ledgers on a blockchain, the winds of innovation still blow—and it is our task that they carry American leadership forward," he said.
Legislative Support and Implementation Timeline
The initiative builds on recent legislative victories, including President Trump's signing of the GENIUS Act, which established a regulatory framework for stablecoins. Chairman Atkins endorsed ongoing Congressional efforts to pass comprehensive crypto market structure legislation by the end of the year.
The SEC has already begun implementing the President's Working Group recommendations on digital asset markets, with staff directed to draft rules for public comment on crypto asset distributions, custody, and trading.
Industry Response and Market Implications
The announcement represents a seismic shift in regulatory approach that could have far-reaching implications for:
Crypto Businesses: Companies that moved operations offshore due to regulatory uncertainty may now find compelling reasons to return to U.S. markets.
Traditional Finance: Banks, asset managers, and other financial institutions will have clearer pathways to offer crypto-related services to their clients.
Innovation: The promise of regulatory clarity and business-friendly rules could unleash what Chairman Atkins described as a "Cambrian explosion in innovation."
Investors: Both institutional and retail investors will benefit from increased choice, better protections, and access to previously unavailable products and services.
Looking Ahead
Chairman Atkins concluded his remarks with a clear message about American leadership in the digital finance revolution: "We have never been content to follow. We will 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."
As Project Crypto moves from announcement to implementation, market participants will be watching closely for the specific rule proposals and guidance that will shape America's crypto future. The SEC has promised to provide regular updates on its progress, signaling a new era of transparency and collaboration between regulators and the crypto industry.
This blog post is based on Chairman Paul S. Atkins' speech at the America First Policy Institute on July 31, 2025. Views expressed are those of the Chairman and do not necessarily reflect the positions of other SEC Commissioners.