Project Crypto: SEC Chair Promises Clarity, Ends Regulation by Enforcement

U.S. Securities and Exchange Commission (SEC) Chairman Paul Atkins has signaled a decisive shift in the regulator’s approach to cryptocurrencies, pledging a clear framework for digital asset oversight and distancing the agency from its earlier reliance on enforcement actions.

Moving Away From “Regulation by Enforcement”

Speaking at the Wyoming Blockchain Symposium, Atkins stressed that his administration would no longer pursue digital asset projects through punitive enforcement. Instead, he pledged to “embrace innovation” and ensure that only a narrow fraction of tokens fall under securities laws. “It is a new day,” Atkins told attendees, adding that regulatory clarity, not intimidation, would now guide the agency’s work.

Atkins’ remarks expand on his July 31 policy address at the America First Policy Institute, where he unveiled “Project Crypto,” a sweeping initiative to modernize U.S. digital asset regulations and position the country as a global leader in blockchain markets. The announcement followed the President’s Working Group on Digital Asset Markets’ report, Strengthening American Leadership in Digital Financial Technology, which the SEC chair described as a “blueprint to make America first in blockchain and crypto technology.”

Defining the Scope of Securities Laws

A central feature of Project Crypto is the narrowing of securities classifications for digital assets. Atkins declared that most cryptocurrencies should not be treated as securities, marking a break from the broad interpretation adopted by previous regulators. He directed SEC staff to draft simplified rules for crypto asset issuance, custody, and trading while also developing new exemptions and safe harbors to reduce compliance burdens on early-stage projects.

The initiative is designed to encourage U.S.-based innovation and reshore crypto businesses that had relocated due to uncertainty in the regulatory landscape.

Charting a New Path for U.S. Crypto Markets

Project Crypto focuses on five priorities: establishing clear rules for token classification, safeguarding self-custody while modernizing custody standards, fostering competition through unified “super-app” platforms, supporting DeFi and asset tokenization, and introducing innovation exemptions to fast-track new business models. 

By emphasizing the above aspects, Atkins has positioned Project Crypto as a cornerstone of U.S. digital asset policy under his tenure. The program seeks to integrate blockchain into the broader financial ecosystem without stifling technological progress.

As Congress continues to deliberate on broader crypto legislation, Atkins has made clear that the SEC will move forward with its own framework. “Now we want to embrace innovation,” he said, underscoring his vision of transforming the United States into the “crypto capital of the world.”

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice