SEC Launches 'Project Crypto' to Bolster Digital-Asset Industry in U.S. — Barrons.com

By Joe Light

A year ago, one of the Securities and Exchange Commission's primary targets was the crypto industry, which the agency said in myriad lawsuits was widely flouting securities laws. Now, SEC Chairman Paul Atkins says the agency is going to do everything in its power to make the U.S. the most attractive country to digital-asset firms in the world.

In a speech at the America First Policy Institute on Thursday, Atkins said he would launch an agency-wide effort called "Project Crypto" in order "to enable America's financial markets to move on-chain."

The speech comes a day after the White House released a 160-page report with legislative and regulatory recommendations for fostering the crypto industry. The SEC will implement all of those recommendations, Atkins said.

"The President said last week that he wants 'the entire world running on the backbone of American technology.' I stand ready to help get that job done," said Atkins, according to a copy of his prepared remarks.

What that means in practice will be important not just to the price of cryptocurrencies like Bitcoin but to crypto trading platforms and other financial firms including Coinbase Global and Robinhood Markets. They had run afoul of the SEC under former Chair Gary Gensler during President Joe Biden's administration.

Among the changes Atkins said he would make would be to write "clear guidelines" establishing when a token is a security, a commodity, a stablecoin, or something else. That is critical because different types of tokens may be regulated differently.

He said he wanted to make it easier for companies to raise money through so-called initial coin offerings in the U.S., or for companies to issue tokenized securities on blockchains, the digital ledgers used to track crypto transactions.

In the speech, Atkins also said he would seek to allow both securities and non-security tokens to trade on the same SEC-regulated platforms.

"Regulators should provide the minimum effective dose of regulation necessary to protect investors while allowing entrepreneurs and businesses to flourish," said Atkins, who before entering the administration was a consultant for crypto firms and other traditional financial institutions.

The SEC's push comes even as Congress is working on its own rules for crypto trading, including on how to decide whether a token falls under securities regulation. President Donald Trump earlier this month signed into law a bill setting rules for so-called stablecoins, a type of cryptocurrency whose value is pegged to the dollar. The House of Representatives separately passed broader legislation setting rules for crypto trading, and the Senate is expected to take up the topic in the fall.

That legislation could take several more months to pass and could run aground amid opposition from Democrats. Many want to put in place prohibitions on Trump making money from his own crypto ventures while in office. Trump has disclosed hundreds of millions of dollars in profit from crypto-tied investments.

But even if Congress is slow to move forward, it's clear that the Trump administration plans to do everything in its power to give the crypto industry smooth sailing for the foreseeable future.

Write to Joe Light at joe.light@barrons.com

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