Project Crypto: SEC’s Plan to Make America a Crypto Superpower

Aug 4

On July 31, 2025, SEC Chairman Paul S. Atkins delivered a speech unveiling "Project Crypto," a sweeping Commission-wide initiative to modernize securities rules for the digital asset era. The project aims to establish the United States as the global leader in blockchain innovation and on-chain financial markets.

Atkins framed the project as critical to realizing President Trump’s vision of making America the "crypto capital of the world." Drawing historical parallels—from the Buttonwood Agreement launching a stock exchange in New York in the late 1800s to the digitization of trading in the 1960s—Atkins emphasized the need to drive innovation in the digital asset markets rather than stifling it.

He pointed to the recent release of the President’s Working Group (“PWG”) report on Digital Asset Markets as "the blueprint to make America first in blockchain and crypto technology." Under Project Crypto, the SEC will work with the Crypto Task Force, led by Commissioner Hester Peirce, to fast-track implementation of the PWG’s recommendations and bring crypto innovation back onshore.

Key Initiatives of Project Crypto:

1. Bringing Crypto Asset Distributions Back to America:

The SEC will establish a regulatory framework for crypto asset distributions, which are critical to supporting productive, U.S.-based blockchain enterprises. Atkins emphasized that “most crypto assets are not securities.” But regulatory clarity is essential. Project Crypto will create guidelines to help issuers and investors readily classify digital assets (e.g., digital collectibles, digital commodities, stablecoins, or securities). For digital assets that are securities, SEC will design a tailored framework that includes purpose-fit disclosures, exemptions, and safe harbors. The initiative also supports the tokenization of traditional securities under a modernized regime.

2. Maximizing Choice for Custody and Trading:

Acknowledging that custody preferences vary, the SEC will modernize its custody rules to reflect the realities of crypto. Atkins reiterated his view that self-custody of digital assets is "a core American value," but also recognized the need to update outdated rules for registered custodians. Project Crypto will promote competition and investor choice by enabling multiple custody and trading models to operate under clear, fit-for-purpose regulations.

3. Innovation Through “Super-Apps”:

The SEC aims to empower broker-dealers and other intermediaries to offer “Super-Apps”, that is a broad suite of services—including trading of crypto securities and non-securities, staking, and lending—under a single regulatory license. Atkins called for regulators to work together to harmonize requirements across agencies, reduce redundancy, and apply “the minimum effective dose of regulation necessary to protect investors while allowing entrepreneurs and businesses to flourish.” He cited the banking regulatory model as a promising example and directed SEC staff to develop a framework that will permit non-security crypto assets and crypto asset securities to be traded side-by-side on SEC-regulated platforms.

4. Updating Rules for On-Chain Software:

The SEC will revise outdated rules to enable the growth of both intermediary-run and decentralized on-chain systems. (On-chain means transactions that are recorded and validated directly on the blockchain). Future rules will protect software developers, provide workable standards for on-chain intermediaries, and ensure decentralized systems can operate within securities markets—without unnecessary or duplicative regulations.

5. More Details on the Innovation Exemption:

In his speech, Chairman Atkins expounded on the need for an “Innovation Exemption” for digital asset innovators. Instead of navigating a complex and rigid regulatory maze, qualifying projects would be governed by principles-based conditions aligned with the core goals of the securities laws. Atkins urged the SEC and the industry to prioritize commercial viability in shaping the exemption’s contours.

What Does This All Mean

This development suggests the SEC will reshape rules that empower companies with opportunities to innovate and cultivate crypto business in the U.S. The SEC is signaling a significant shift—from enforcement led regulation to a proactive, innovation-friendly stance to policymaking—positioning itself as a partner in America’s crypto future.

The SEC is not the only financial regulator signaling swift action to reshape crypto regulations. Recently, Acting CFTC Chairman Caroline Pham announced a “Crypto Sprint” to start CFTC’s implementation of the recommendations from the PWG.

How Can We Help

The digital asset legal landscape is evolving quickly. At Mitchell Sandler, our team is well positioned to help clients evaluate eligibility for exemptions, structure DeFi and digital asset projects with regulatory confidence, interact with SEC, CFTC, and other regulators, respond to regulatory inquiries, and advocate for clients involved in enforcement investigations.

If your organization has questions or needs assistance with these issues, please contact Seth Waxman, Chloé Dolsenhe, Bree Murphy, and Sean Hennessy to discuss how we can support you.

Download a PDF of this article here.