Atkins: All Divisions Mobilized

Atkins emphasized, “We will have the world run on American technology,” while noting that all SEC divisions are now mobilized to achieve this goal. The project is being implemented in line with the President’s Working Group on Digital Assets (PWG) report and laws such as the GENIUS Act.

What is Project Crypto?

1. Clear Regulatory Framework for Crypto Distributions: Project Crypto aims to establish a clear regulatory framework for crypto asset distributions in the U.S. The SEC will issue guidelines to help determine whether a crypto asset is a security, commodity, stablecoin, or another type of digital asset. Classification as a security is designed to be flexible, supporting product design and investor participation rather than hindering innovation.

2. Freedom in Custody and Trading Venue Selection: The SEC will ensure that market participants can decide where and how to custody their crypto assets. Custody requirements for registered intermediaries will be modernized, and a competitive custody services market will be promoted.

3. Market Competition and “Super-Apps”: Project Crypto envisions a regulatory environment where trading platforms and intermediaries can offer both security and non-security products under a single license structure. Following PWG recommendations, SEC and CFTC coordination will increase competition and liquidity while reducing duplicative regulatory burdens.

4. On-Chain Innovation and DeFi Support: The SEC will create regulatory space for decentralized (DeFi) protocols and automated market makers (AMM). Practical and reasonable rules for on-chain systems will facilitate the trading of tokenized securities and other digital assets in the U.S. market.

5. Innovation Exemptions and Commercial Viability: The SEC is exploring an “innovation exemption” to allow new business models and technologies to quickly enter the market, ensuring that regulations do not stifle innovation or drive businesses offshore.

Project Crypto marks the beginning of a new era in digital asset regulation in the U.S. By supporting on-chain markets, promoting innovation, and providing clear rules, the SEC aims to make America the leader in the global digital finance revolution. Market participants should prepare for a more dynamic, competitive, and innovation-friendly regulatory environment.

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In its staff statement, the SEC referenced the Securities Act of 1933 and the Exchange Act of 1934. The agency emphasized that some liquid staking practices mentioned in the statement do not constitute securities offerings under existing legal frameworks. This move aims to reduce legal uncertainty in the markets. 

Liquid staking involves locking digital assets into a protocol in exchange for representative tokens. According to the SEC, this mechanism does not align with the definition of a security in some cases. 

Atkins Sends Clear Message: Crypto-Friendly Approach Will Continue 

SEC Chair Paul Atkins commented in support of the statement. He noted that the clarification on liquid staking is significant for crypto-related activities beyond the SEC’s core jurisdiction. 

Interestingly, the SEC published this clarification as firms like Jito Labs, VanEck, and Bitwise seek approval for liquid staking ETF strategies. In this era of growing institutional interest, regulatory steps that provide legal clarity are broadly welcomed across the sector. 

Meanwhile, the liquid staking sector is expanding rapidly. According to DeFiLlama data, the total value locked is approaching $67 billion, with Ethereum protocols accounting for $51 billion of that. 

Crypto ETFs and Project Crypto Initiative 

This move is considered part of the SEC’s broader transformation plan for crypto regulation. The agency recently launched an initiative called Project Crypto, based on recommendations from the White House Digital Assets Working Group. 

Under the leadership of Paul Atkins, the new SEC administration is shifting away from the “enforcement-first” approach associated with former SEC Chair Gary Gensler, toward a more inclusive regulatory model. This change began with a clarification regarding proof-of-stake protocols issued in May. 

Additionally, on July 29, the SEC approved an in-kind creation and redemption model for Bitcoin and Ether ETFs. This allows authorized participants to swap ETF shares directly with the underlying assets instead of using cash. 

Ultimately, this approach aims to make digital assets more accessible. The House of Representatives is also expected to pass reform bills on market structure and CBDC opposition before the August recess. In short, the U.S. crypto industry is officially entering a new era of comprehensive regulatory reform. 

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Led by the Crypto Task Force, these roundtables were announced shortly after Commissioner Paul Atkins revealed the new initiative. The SEC intends to build a more inclusive and regulatory-friendly environment within the crypto ecosystem. Priority will be given to projects that have fewer than ten employees and have been operating for less than two years. 

The first meeting will be held on August 4 in Berkeley, California. Additional sessions will follow on August 19 in Boston and September 4 in Dallas. Chicago and New York will host the next roundtables on September 15 and September 25, respectively. 

Small Projects Take the Spotlight at SEC Roundtables 

In the past, SEC roundtables primarily featured major players like BlackRock and Fidelity. This time, however, the focus shifts to less recognized startups. 

Commissioner Hester Peirce stated that the agency wants to hear from those who haven’t previously participated in policymaking. The goal is to ensure new regulatory frameworks are suitable not only for large corporations but also for small and innovative teams. 

Meanwhile, Project Crypto also addresses foundational regulatory issues, such as the classification of digital assets and the registration of crypto products. Additionally, the SEC is working toward transitioning U.S. financial markets to on-chain infrastructures. 

Three more meetings are scheduled in October: Irvine on the 3rd, Cleveland on the 24th, and Scottsdale on the 29th. The final two roundtables will take place on November 12 in New York and December 5 in Ann Arbor. 

Project Crypto Signals a New Era in SEC’s Approach to Web3 

With Project Crypto, the SEC demonstrates a more open approach toward the digital asset ecosystem. Through this initiative, the agency aims to deepen engagement with industry stakeholders across the country. Meanwhile, FED member Kugler announced that she will resign on August 8

These upcoming sessions offer critical opportunities for voices left out of prior regulatory processes. They also help democratize future policy development. 

Ultimately, the SEC is using Project Crypto as a platform to reshape its relationship with the crypto sector—one roundtable at a time.

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