Introduction
SEC Chair Paul S. Atkins, in an unprecedented announcement for the U.S. crypto industry, on July 31, 2025, proclaimed that “most crypto assets are not securities.” This announcement indicates a definitive change in direction from the enforcement-driven approach. Project Crypto, the name of a large reporting effort, has been revealed here to provide context to the multi-faceted effort to revise regulations, champion innovation, and reposition U.S. crypto policy towards a vision to revive leadership in the global financial system.
A New Regulatory Direction under Project Crypto
Atkins introduced Project Crypto at the America First Policy Institute, drawing support from recommendations in the recent White House crypto policy report. The initiative seeks to provide clear guidance on the different types of digital assets, including distinguishing between securities, commodities, stablecoins, and digital collectibles. For any designated as a security, he instructed staff to develop tailored disclosures, exemptions, and safe harbors for ICOs, airdrops, and network rewards, which consider the realities of blockchain-based finance.
Unpacking the U-Turn
Thus far, U.S. crypto enforcement largely reflected former Chair Gary Gensler’s expansive view of the Howey test, which concluded that most tokens were securities. Atkins lavelled that presumption with an uncomplicated statement that most tokens are not securities–setting a stage for a more textured, market-based approach to regulation.
This pivot is driven by a belief that past enforcement has stifled U.S.-based innovation and driven crypto businesses overseas—a trend Atkins seeks to reverse by bringing them back home.
Key Focus Areas of Project Crypto
Clear Asset Classification
Atkins instructed the SEC to devise straightforward rules to help companies and investors identify whether a token qualifies as a security or falls under other categories such as commodity or stablecoin. This aims to reduce confusion surrounding blockchain projects.
Tailored ICO and Airdrop Guidelines
Recognizing the role of ICOs, airdrops, and network incentives in decentralized finance, the SEC will create bespoke disclosures and exemptions to encourage lawful fundraising—while guarding investor protections.
Custody and Trading Venue Reform
Atkins emphasized self-custody as a core right while pledging to update the SEC’s old custody regulations to reflect crypto realities. He also championed the development of “super apps”—platforms that enable brokers to offer both crypto and traditional securities under a unified license.
Embracing On Chain Finance
Project Crypto proposes recalibrating federal market rules to accommodate decentralized finance (DeFi) and on-chain trading. Atkins advocated distinguishing between intermediated and automated market activity—and even hinted at modifying Regulation NMS for tokenized securities.
Industry Reaction and Remaining Challenges
The crypto industry widely welcomed the announcement. Executives and legal experts hailed it as a “regulatory turning point” that could reshore U.S. innovation and provide long-overdue clarity. Mike Piwowar of the Milken Institute called it the “big bang” moment in U.S. crypto regulation.
Still, legal observers caution that without formal legislation from Congress, uncertainty may persist. As mentioned by attorney Bill Morgan recently, until and unless lawmakers create rules regarding what constitutes a security, the industry will have to deal with shifting interpretations.
What Comes Next: Timeline and Legislative Details
The SEC intends to propose rules for public comment in the next few months and continue to explore interim action under current authority. Meanwhile, bipartisan momentum continues in Congress: lawmakers are working on legislation like the CLARITY Act to define crypto tokens and stablecoin frameworks more clearly.
Despite political hurdles, Atkins framed Project Crypto as timely. He pointed to the GENIUS Act—Trump-backed stablecoin legislation—and the White House’s working group report as the guiding blueprint for reforming U.S. digital finance.
Conclusion
SEC Chair Paul Atkins’ announcement represents a fundamental shift in crypto regulation in the United States—declaring that most crypto tokens are not securities and beginning Project Crypto to inspire structural modernization. While industry stakeholders and policymakers express optimism, the road ahead to enabling sustainable clarity and support for domestic growth will require harmonisation between regulators, lawmakers and innovators.
