Project Crypto: SEC’s Plan to Make America a Crypto Superpower
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his view that self-custody of digital assets is "a core American value," but also recognized the need to update outdated rules for registered custodians.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.
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Seth Waxman is a Partner at Mitchell Sandler. He leads the White Collar Defense and Corporate Investigations Group. He represents financial institutions, financial service providers, mortgage lenders, health care companies, public officials and all other manner of businesses and individuals facing government investigations, criminal and civil actions, and regulatory enforcement. He is a nationally recognized former federal prosecutor with 30 years’ experience.
Bree Murphy is senior counsel at Mitchell Sandler. She has two decades of experience advocating for her clients in the boardroom and the courtroom as they navigate government scrutiny, internal investigations, civil litigation, and criminal prosecution. With a deep understanding of the impact an investigation may have on individuals and businesses, Bree defends and guides her clients with an eye towards minimizing stress and disruption.
Sean Hennessy is Counsel at Mitchell Sandler. He is a seasoned litigator and former federal enforcement attorney with extensive experience representing businesses and individuals in complex civil litigation, government investigations, and regulatory enforcement actions. He has served as a Trial Attorney in the Division of Enforcement at the Commodity Futures Trading Commission (CFTC), where he led high-stakes investigations and federal court prosecutions involving insider trading, market manipulation, financial fraud, and other misconduct. While at the CFTC, Sean served on the agency’s Digital Assets Task Force and was a key advisor to leadership on emerging legal and technological developments in crypto enforcement and regulation.
Chloé Dolsenhe is Senior Associate at Mitchell Sandler. She specializes in regulatory compliance, government enforcement, and internal investigations primarily for financial technology companies, depository institutions and third-party service providers. She brings her experience as a government enforcement attorney where she leveraged AI in investigations and led the Generative AI Working Group in the Enforcement Division of the Office of the Comptroller of the Currency. She advises clients seeking compliance guidance when integrating artificial intelligence and integrating digital assets into their consumer products.