U.S. Securities Chair Atkins Kicks Off "Project Crypto" to Integrate Blockchain Technology in American Financial Markets
In a significant move, the Securities and Exchange Commission (SEC) has launched "Project Crypto" under the leadership of Chairman Gary Gensler. Announced on July 31, this regulatory initiative aims to modernize securities law and bring US financial markets onto blockchain rails [1].
The core focus of Project Crypto is to provide clear, bright-line rules to distinguish Non-Fungible Tokens (NFTs), stablecoins, and investment contracts from securities. This shift moves away from the uncertain and broad Howey Test currently used to determine securities status [1][3][4].
The bright-line rules are designed to differentiate NFTs as digital collectibles that generally will not be treated as securities. Stablecoins, on the other hand, will be subject to regulatory frameworks emphasising reserve management, transaction monitoring, and auditability under acts like the GENIUS Act, but will not necessarily be securities [1][4].
Project Crypto also aims to clarify when an investment contract truly qualifies as a security versus when a crypto token does not meet that threshold [1]. The initiative explicitly rejects the vague Howey Test and commits to developing objective, binary standards that market participants can readily apply [1][2][3][4].
In addition, Project Crypto includes exploring safe harbours for airdrops, network rewards, initial offerings, and modernizing custody rules to support crypto-native providers and self-custody rights [1]. The goal is to create a unified, clear regulatory framework that allows innovation to continue safely on-chain without forcing issuers or investors offshore [1][5].
The SEC's Project Crypto will form the core of the SEC's new regulatory agenda, aimed at implementing recommendations from the President's Working Group on Digital Asset Markets [1]. This initiative coincides with the recently enacted GENIUS Act, which provides a stablecoin regulatory framework, pushing forward President Trump's objective to make America "the crypto capital of the world" [1].
As investor interest in compliant, on-chain asset management tools like Best Wallet grows, the initiative will draft new securities rules to accommodate tokenized assets, disintermediated finance, and smart contract-based settlement systems [1]. The Commission will also consider rewriting or eliminating legacy regulations like Reg NMS to encourage venue competition and improve capital formation [1].
With Project Crypto, the SEC is taking a significant step towards fostering growth in the US crypto market by providing clear, unambiguous rules to categorise crypto assets and promoting innovation in this space.
[1] Source: SEC Press Release, July 31, 2025 [2] Source: CoinDesk, August 1, 2025 [3] Source: Forbes, August 2, 2025 [4] Source: Bloomberg, August 3, 2025 [5] Source: Wall Street Journal, August 4, 2025
- TheSEC's Project Crypto, under the leadership of Chairman Gary Gensler, is intended to modernize US financial markets and secure a regulatory framework for business activities involving technology, such as stablecoins and NFTs, in the finance sector.
- As part of its new regulatory agenda, the SEC's Project Crypto aims to draft new securities rules to accommodate on-chain asset management tools, disintermediated finance, and smart contract-based settlement systems, promoting growth in the US crypto market.
