SEC Chair Paul Atkins launched Project Crypto, a commission-wide initiative to update securities rules for crypto assets and onchain financial markets.
The initiative directs SEC policy divisions to work with the Crypto Task Force on proposals covering crypto asset distributions, custody and trading. Atkins said staff will prepare rules for public notice and comment, while the SEC may also use interpretive, exemptive and other authorities before full rulemaking is complete.
Project Crypto follows the White House working group’s digital asset recommendations and the GENIUS Act stablecoin law. Atkins also tied the SEC work to congressional market-structure legislation, including the CLARITY Act.
The SEC effort comes after the CLARITY Act cleared Senate Banking in May, moving the bill into the next stage of negotiations over SEC and CFTC jurisdiction, custody, token issuance, DeFi treatment and market intermediary rules.
Atkins said most crypto assets are not securities, while some transactions involving crypto assets can still fall under investment-contract analysis. Project Crypto will ask staff to develop guidelines that place assets into categories such as digital collectibles, digital commodities and stablecoins.
The SEC later issued a joint interpretation with the CFTC that created a token taxonomy covering digital commodities, digital collectibles, digital tools, stablecoins and digital securities. That action also addressed airdrops, protocol mining, protocol staking and wrapping non-security crypto assets.
Project Crypto also includes purpose-built disclosures, exemptions and safe harbors for crypto asset transactions subject to securities law. Atkins listed initial coin offerings, airdrops and network rewards among the areas where staff should propose tailored treatment.
The plan includes an innovation exemption for new business models that do not fit existing rules. Atkins said the exemption could allow market participants to launch under conditions such as periodic SEC reporting, whitelisting or verified-pool functions, and token standards with built-in compliance features such as ERC-3643.
Project Crypto also targets trading venues, custody and onchain software systems. Atkins said broker-dealers with alternative trading systems should be able to trade non-security crypto assets alongside crypto asset securities, traditional securities, staking and lending under a more efficient licensing structure.
The plan includes a framework for non-security crypto assets and crypto asset securities to trade side by side on SEC-regulated platforms. Atkins also directed staff to examine whether certain non-security crypto assets tied to investment contracts can trade on venues that are not SEC-registered, including state-licensed crypto platforms and CFTC-regulated platforms.
Those priorities match the earlier onchain rule overhaul Atkins outlined for exchanges, brokers, clearing, settlement and crypto vault products. His latest Project Crypto agenda moves those issues into a commission-wide implementation track.
Project Crypto also includes rules for onchain software systems. Atkins said SEC staff should draw lines between intermediated and disintermediated activity, protect publishers of software code, and create workable rules for intermediaries that operate onchain systems.
As of the Project Crypto launch, SEC staff had been directed to prepare proposals for crypto asset distributions, custody and trading, while the CLARITY Act remained outside final enactment and still required full Senate passage, House alignment and a presidential signature.
The post SEC Launches Project Crypto To Modernize Rules For Onchain Markets appeared first on Crypto Adventure.
