What does Project Crypto Mean for Open Money?
The SEC just unveiled Project Crypto — a sweeping initiative to modernize U.S. securities law and bring digital asset markets onchain. It promises clear token classification, support for DeFi and self-custody, and a path for crypto super-apps.
The winds have shifted.
On July 31, SEC Chair Paul Atkins delivered a speech that redefined new regulatory priorities. Speaking at the America First Policy Institute, Atkins unveiled "Project Crypto," a sweeping, commission-wide initiative that promises to modernize securities law, bring digital asset markets onchain, and finally give the United States a regulatory framework designed for the realities of crypto-native finance.
What will be most interesting to see is if Project Crypto signals the arrival of an era where the SEC speaks the language of code, tokens, and distributed networks.
For years, one of the largest liabilities of the crypto space was that regulators and policy makers just didn’t understand the fundamental technologies and all of their implications. It’s unclear how much Project Crypto will change all of that, but it does seem like a step in the right direction.
Why now?
This isn’t happening in a vacuum. The backdrop is an aggressively pro-crypto federal administration.
Daniel McGlynn
The current administration returned to office with a mandate to make the U.S. the "crypto capital of the world." Executive Order 14178 created the President’s Working Group on Digital Asset Markets (PWG), which released a 166-page report on July 30 calling for:
- onshoring of crypto markets
- modernization of custody and banking rules
- legal clarity on digital assets classification
The report described these changes as ushering in a "Golden Age of Crypto."
Meanwhile, discontent had grown with the SEC under former Chair Gary Gensler. His tenure, marked by enforcement actions against Coinbase, Gemini, and others, followed the FTX collapse and was defined by a strategy of regulation by litigation. Many firms fled offshore. In contrast, Atkins criticized this approach as a "crusade" and began reversing course even before Project Crypto's launch.
Congress added momentum by passing the GENIUS Act on July 18, creating the first federal stablecoin framework. The House also approved a crypto market-structure bill, though the Senate remains in debate.
Daniel McGlynn
Unveiling Project Crypto
Project Crypto is structured around five regulatory pillars — each representing a foundational shift.
1. Crypto capital formation in the U.S.
- Bright-line tests to classify digital assets
- Safe harbors and tailored disclosures for:
- token launches
- airdrops
- network rewards
- Legal paths for firms to tokenize traditional securities and return onshore
2. Custody modernization
Atkins acknowledged a key industry demand: update archaic custody rules to reflect the realities of self-custody and digital-native assets. His remarks directly criticized Operation Choke Point 2.0 and the previous SEC’s special-purpose broker-dealer framework.
3. Super-apps for integrated finance
The SEC envisions:
- platforms offering trading of traditional securities, crypto securities, and non-security tokens
- staking, lending, and custody—all under a single regulatory license
- venues with both SEC and CFTC integration
Daniel McGlynn
4. Onchain software & DeFi
Atkins proposed amending Regulation NMS to support onchain markets, both intermediated and dis-intermediated. He emphasized that regulation should not force middlemen into ecosystems that function without them. Pure software publishers would be protected under the initiative.
5. The innovation exemption
To accommodate new business models:
- a principles-based exemption would allow market entry without full registration
- possible conditions: periodic reporting, smart-contract-based compliance, whitelisting, token standards like ERC-3643
Additional features
Project Crypto also includes:
- Token classification guidance: clear distinctions between collectibles, commodities, stablecoins, and securities
- Agency coordination: SEC will work closely with the CFTC to avoid jurisdictional overlap and implement federal-level spot market rules
- Urgency and interim relief: The SEC will use interpretive guidance and exemptive authority to avoid smothering innovation while formal rule-making proceeds
Implications for crypto markets
The significance of Project Crypto can’t be overstated. With clearer classification rules and legally defensible safe harbors, crypto issuers may finally open U.S. participation in token offerings — without fearing lawsuits. That shift alone could jumpstart an innovation boom, long delayed by regulatory uncertainty.
The super-app vision, if realized, would change the investor experience completely. No longer would users have to navigate fragmented platforms or hop between regulated and unregulated venues. Instead, integrated apps could support crypto and traditional assets side-by-side, harmonizing custody, trading, and compliance.
DeFi protocols and tokenized securities stand to benefit as well. Amendments to Reg NMS could enable onchain trading of everything from equities to bonds to stable-value funds. Smart-contract-based settlement would become a core feature of regulated markets — offering 24/7 availability, auditability, and near-instant finality.
Consumer advocates are wary, arguing that the plan could enable fraud if oversight is too light. They point to FTX’s implosion as a cautionary tale. But Atkins insists that principles-based safeguards — like whitelisting and periodic disclosures — will mitigate risk while preserving innovation.
Still, political challenges loom. The Senate has not yet passed the necessary companion legislation. And the initiative is politically charged, reflecting how recent presidential politics is backed by deep-pocketed crypto donors, which raises more than a few conflict-of-interest concerns.
What comes next
- Rule proposals: Expect detailed guidance on custody, classification, trading, and super-app compliance.
- Public comment periods: Stakeholders should monitor the Federal Register and weigh in.
- Regulatory coordination: SEC-CFTC memoranda are likely as agencies align frameworks.
- Global pressure: With the EU implementing its MiCA regime, the U.S. risks falling behind if delays occur.
- Market response: Watch for exchanges, wallets, and DeFi platforms reshaping strategies to return to U.S. markets.
Why Project Crypto matters for Open Money
Project Crypto reflects Open Money’s long-standing framework. The initiative aligns with our core tenets: permissionless innovation, user sovereignty, transparent infrastructure, and composability.
- Bright-line classification and safe harbors create a rule-of-law foundation where new economic experiments can thrive.
- Custody modernization supports the Open Money framework of autonomy through self-custody and interoperable custodial networks.
- Super-app structures point toward a composable digital economy where DeFi, securities, and digital commodities exist on unified rails.
- The innovation exemption mirrors our call for principles-first compliance that protects users without punishing creativity.
In short, Project Crypto could finally provide the scaffolding that allows Open Money’s ideals to flourish.
If the SEC follows through, the U.S. may become a proving ground for open, programmable, modular finance.