U.S. SEC Launches “Project Crypto” to Power On-Chain Markets

The U.S. Securities and Exchange Commission (SEC) on July 31, 2025, introduced a sweeping initiative called “Project Crypto,” aimed at transforming how the $3.9 trillion digital asset market is regulated. The announcement by SEC Chair Paul Atkins represents the agency’s most significant policy shift on cryptocurrency since it began active enforcement in 2017.

Transitioning From Enforcement to Structured Oversight

Project Crypto introduces a proactive regulatory framework intended to replace years of fragmented policies. “Our goal is to move from a reactive posture of regulation-by-enforcement to a proactive one that fosters innovation while ensuring robust investor protection,” Atkins said on Wednesday.

The plan is built on three core pillars:

• Unified Licensing Regime: A new “super-app” license will streamline compliance by consolidating federal approvals for exchanges, custodians, and staking providers. This change will eliminate the current state-by-state licensing approach.
• Updated Howey Test Guidance: To resolve long-standing uncertainty, the SEC will publish explicit guidance on how the Howey Test applies to various digital assets.
• Interagency Coordination: In a collaborative move, the SEC will work more closely with the Commodity Futures Trading Commission (CFTC) to minimize regulatory overlaps and clarify responsibilities.

You: “crypto is a scam”

SEC Chairman: launching “project crypto” to “modernize the securities rules & regulations to enable America’s financial markets to move on-chain”

You’re surely paying attention now, right? pic.twitter.com/jvQr335Gyl

— Nate Geraci (@NateGeraci) July 31, 2025

Market Holds Steady as Institutions React Cautiously

The immediate market reaction was relatively subdued, suggesting that investors had anticipated the shift. Bitcoin continued to hold above a critical support level.

Asset	Price	24H Change
Bitcoin (BTC)	$117,833	-0.02%
Ethereum (ETH)	$3,788.54	-3.98%
Total Market Cap	$3.93T	-0.25%

“The market’s stability shows that institutional players are ready to embrace clear regulation,” said Kevin Zhou, Head of Research at DigitalAssetX. “We’re seeing a pivot from speculation toward compliance and structured growth.”

Global Implications and Industry Reactions

The U.S. approach is likely to influence global regulatory frameworks. Michael Trent, a partner at Clifford & Bryce LLP, referred to the project as “a potential blueprint for international regulatory harmonization.”

Industry stakeholders expressed mixed responses:

• Praise for Legal Clarity: “This is the proactive policymaking the industry has long needed,” said crypto journalist Laura Shin.
• Startups Voice Concern: Rachel Kim, General Counsel at FluxNet, a DeFi protocol, warned that small startups could struggle under a unified framework. According to PwC, enhanced compliance requirements may raise operational costs by 20–30%.

A Step Toward Institutionalization

With defined rules for custody and asset classification, Project Crypto may unlock innovative products like crypto ETFs and tokenized real-world assets (RWAs). Companies such as BlackRock and Franklin Templeton have already launched pilot initiatives in tokenized finance, which could accelerate under this new framework.

The SEC will release detailed rule proposals for public comment later in 2025, with implementation expected to begin in 2026. In summary, Project Crypto marks a pivotal moment in digital finance—shifting the focus from courtroom battles to regulated innovation.

The SEC plans to release detailed rule proposals for public comment later in 2025. Implementation is expected to begin in 2026. For many in the crypto industry, July 31, 2025, marks the beginning of a new chapter focused not on regulatory uncertainty, but on compliant, scalable innovation.