SEC Launches “Project Crypto” to Modernize U.S. Crypto Regulations

The U.S. Securities and Exchange Commission (SEC) has announced the launch of Project Crypto, an initiative designed to modernize securities regulations and position the United States as a global leader in crypto and blockchain innovation.

In Brief

• The SEC has launched Project Crypto to update U.S. crypto regulations, enable self-custody, and attract innovation.
• SEC Chair Paul Atkins emphasizes that most crypto assets are not securities and calls for clearer rules to support growth.
• The SEC will support super apps, DeFi integration, and self-custodied wallets as core pillars of the new regulatory framework.

Clear Rules for Crypto Assets

Speaking in Washington, D.C., on July 31, SEC Chair Paul Atkins said Project Crypto is part of the agency’s response to the goal of making the U.S. the “crypto capital of the world.” The initiative will implement key recommendations from the President’s Working Group (PWG) Report on Digital Market Data. One of the top priorities is to bring regulatory clarity to crypto asset distributions in the U.S. Atkins stated that most crypto assets are not securities and attributed legal uncertainty as a reason many innovations have moved offshore. To address this, the SEC will develop new tests to determine whether a crypto asset qualifies as a security. Project Crypto also aims to clarify custody and trading requirements. Atkins criticized past regulatory approaches for limiting investor choice and pledged to modernize custody rules for digital assets held by registered intermediaries. He emphasized that self-custody—the ability to hold and manage crypto assets in a personal wallet—is a fundamental American right:

"I deeply believe in the right to use a self-custodied digital wallet to hold personal crypto assets and participate in on-chain activities like staking."

One License, Many Products

Another key goal is to enable the rise of so-called “super apps”—platforms that allow broker-dealers to offer a wide range of products, including non-security crypto assets, under a single license. The SEC plans to issue new guidance to make this model legally viable without requiring multiple state or federal approvals. The project also seeks to update outdated rules that restrict the use of on-chain software systems in capital markets, including decentralized finance (DeFi). Atkins stated that the SEC will create space for both intermediated and non-intermediated models.

A Cross-Agency Effort

Project Crypto involves multiple SEC divisions and includes a dedicated Crypto Task Force led by Commissioner Hester Peirce. The SEC plans to explore exemptions and other authorities to ensure outdated regulations do not block progress. The initiative follows the recent passage of the GENIUS Act, which laid the foundation for technology-friendly financial reform.

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Source: SEC Launches “Project Crypto” to Modernize U.S. Crypto Regulations on August 1, 2025.

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Frequently Asked Questions (FAQ)

Regulatory Clarity and Crypto Assets

Q: What is the primary goal of the SEC's "Project Crypto"? A: The primary goal is to modernize U.S. securities regulations for crypto assets and foster innovation in the blockchain sector, aiming to make the U.S. a global leader in crypto. Q: What is SEC Chair Paul Atkins' stance on most crypto assets? A: SEC Chair Paul Atkins has stated that most crypto assets are not considered securities, and he believes regulatory uncertainty has driven innovation offshore. Q: How does Project Crypto aim to address legal uncertainty for crypto assets? A: The SEC plans to develop new tests to determine whether a crypto asset qualifies as a security, thereby providing clearer guidelines.

Self-Custody and Investor Choice

Q: What does "self-custody" mean in the context of cryptocurrency? A: Self-custody refers to the ability of an individual to hold and manage their crypto assets directly in their own personal wallet, rather than through a third-party custodian. Q: Why is self-custody considered important by the SEC? A: The SEC views self-custody as a fundamental right, allowing individuals to control their digital assets and participate in on-chain activities. Q: How will Project Crypto modernize custody rules? A: The initiative aims to update existing rules that have limited investor choice and to modernize custody requirements for digital assets managed by registered intermediaries.

Super Apps and DeFi Integration

Q: What are "super apps" in the context of crypto regulation? A: Super apps are envisioned as platforms that would allow broker-dealers to offer a wide range of financial products, including non-security crypto assets, under a single regulatory license. Q: How will the SEC enable the rise of "super apps"? A: The SEC plans to issue new guidance that will make this model legally viable, reducing the need for multiple state or federal approvals. Q: How does Project Crypto address Decentralized Finance (DeFi)? A: The project seeks to update outdated rules that may hinder the use of on-chain software systems in capital markets, including DeFi, and will support both intermediated and non-intermediated models.

Crypto Market AI's Take

The SEC's "Project Crypto" signifies a crucial step towards bringing much-needed clarity and structure to the burgeoning digital asset landscape in the United States. This initiative, aiming to foster innovation while providing regulatory certainty, aligns with the growing demand for sophisticated tools in the crypto space. At Crypto Market AI, we are dedicated to empowering users with advanced AI-driven insights and trading solutions. Our platform offers AI-powered trading bots and AI analysts that leverage machine learning for market analysis and predictions, helping users navigate the complexities of the crypto market. We believe that regulatory clarity, like that sought by Project Crypto, will further enable the adoption of advanced financial technologies and allow platforms like ours to provide even more robust services to our users.

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