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Securities and Exchange Commission Chair Paul Atkins announced a deregulation blitz dubbed “Project Crypto” on Thursday that could turbocharge the integration of traditional financial markets with blockchain technology and enable the creation of financial “super-apps.”
Paul Atkins said his “plan for crypto market primacy” will consider benefits and risks of “moving our markets from an off-chain environment to an on-chain one.”
Atkins’ speech came a day after the president’s Working Group on Digital Asset Markets unveiled a long-awaited, 160-page report recommending policies to fulfill Donald Trump’s campaign promise to make the US the “crypto capital of the world.”
Atkins said he had directed SEC staff to develop proposals to implement the working group’s recommendations.
The proposals should address lingering confusion over the regulatory status of crypto assets, make it easier for traditional financial institutions to hold crypto on customers’ behalf, enable the creation of all-in-one financial “super-apps,” and “unleash the potential of on-chain software systems in our securities markets.”
“Many of the Commission’s legacy rules and regulations do not make sense in the twenty-first century—let alone for on-chain markets,” Atkins said.
Former SEC chair and Atkins’ predecessor, Gary Gensler, repeatedly said the vast majority of crypto assets were securities, like stocks and bonds.
Securities are subject to expensive registration and disclosure requirements, and Gensler’s SEC brought dozens of lawsuits against crypto companies for their failure to register with the agency.
“Despite what the SEC has said in the past, most crypto assets are not securities,” Atkins said.
Under Project Crypto, SEC staff will issue new guidelines to make clear which crypto assets qualify as securities, and which do not.
For months, lawmakers urged by Trump have been trying to do the same via so-called market structure regulation. The House of Representatives approved a market structure bill dubbed the Clarity Act last month, and Senators are in the midst of drafting their own competing bill.
While most crypto companies are eager to dodge SEC oversight, some might prefer issuing tokens that come with equity rights, according to Atkins. And he doesn’t want existing SEC regulations to deter them.
“Investors will benefit from the opportunity to earn distributions, voting rights, and other features typical of securities,” the SEC chair said.
“Projects should not be forced to establish decentralised autonomous organisations and offshore foundations or decentralise too early if this is not their desired plan of action.”
