SEC Launches Project Crypto to Modernize Crypto Regulations
The U.S. Securities and Exchange Commission (SEC) on Thursday launched Project Crypto, an initiative to modernize crypto regulations and adapt legacy securities rules for on-chain finance. Chair Paul Atkins clarified that most digital assets do not qualify as securities under the Howey Test, addressing past ambiguity. The SEC will collaborate with the Crypto Task Force, led by Commissioner Hester Peirce, to issue interpretive statements, exemptions and safe harbors for crypto issuance, custody and trading. It aims to foster innovation, support new market entrants and protect Main Street investors before Congress enacts dedicated legislation. For tokens deemed securities, the SEC plans flexible disclosure requirements covering ICOs, airdrops and network rewards. Project Crypto underlines the regulator’s commitment to balanced oversight, strengthening U.S. leadership in digital asset markets and reversing policies that drove firms overseas.
Bullish
The launch of Project Crypto provides regulatory clarity by modernizing outdated rules and clarifying asset status under the Howey Test. Clear guidelines, safe harbors and exemptions are expected to reduce legal uncertainty for issuers and exchanges, encouraging innovation and bringing firms back to the U.S. Improved oversight and balanced investor protections can attract institutional capital and support market growth. In the short term, positive sentiment and reduced compliance costs may boost trading activity and liquidity. Over the long term, standardized disclosure requirements and on-chain finance frameworks can underpin sustainable growth, strengthen U.S. leadership in digital assets and lead to broader market adoption.