The SEC announced a new plan for "encryption projects" to promote on-chain activities in the U.S. market and rewrite Token regulations.

The U.S. Securities and Exchange Commission (SEC) will launch a plan called "Project Crypto" to update securities rules based on Blockchain activities and help the U.S. market transition to an on-chain model. Chairman Paul Atkins stated in a speech at the American Enterprise Institute on July 31 that the initiative will implement the recommendations made in the presidential digital asset market working group report released this week and will be built on the federal payment stablecoin framework of the new GENIUS bill. He emphasized that these remarks represent his personal views and do not necessarily reflect the views of the agency or other commissioners.

1. Clear Definition of Tokens and Regulatory Framework

Atkins stated that staff from various policy departments would coordinate with the cryptocurrency working group led by Commissioner Hester Peirce to "quickly" draft proposals using temporary tools (such as interpretive guidance, exemptions, and other relief measures). He added that clarifying the status of tokens would be a core goal, and the plan aims to establish guidance for classifying crypto assets and determining when they constitute an "investment contract."

Atkins stated, "Most crypto assets are not securities," and instructed staff to develop appropriate disclosures, exemptions, and safe harbors for initial token offerings, airdrops, and network rewards. The goal is to bring back token distributions that have migrated overseas due to legal uncertainty.

II. Tokenization Guide and Self-Custody

As the company seeks to tokenize stocks, bonds, and other instruments, Atkins instructed employees to work with issuers of tokenized securities in the U.S. and to provide appropriate relief to prevent U.S. investors from being excluded. Additionally, he described self-custody as "a core value of America." The SEC chairman added that the agency will update the custody requirements for broker-dealers and investment advisers to accommodate cryptocurrencies and will revisit restrictions related to previous policies, such as SAB 121 and special purpose broker-dealer structures.

3. Vision of the "encryption project": One-stop trading and simplified permissions

Project Crypto also envisions that venues regulated by the SEC will offer trading of non-securities cryptocurrencies, crypto asset securities, and traditional securities under a single license, along with services such as staking and lending, thereby reducing duplicative state and federal licenses. SEC staff will also develop a framework for parallel trading of non-securities and securities, and consider allowing certain non-securities digital assets subject to investment contract arrangements to trade on venues that are not registered with the SEC, paving the way for margin listings on CFTC-regulated platforms.

IV. DeFi and Market Channels: Protecting Code Publishers and Innovation Exemptions

Atkins guarantees that the plan will protect the "pure publishers" of the code, draw a clear line between intermediary and non-intermediary activities, and establish feasible rules for the operators of the on-chain system. Adapting to tokenized securities trading may require updating the regulatory national market system to better accommodate competition.

In addition, the SEC is considering a principle-based "innovation exemption" to trial new models without immediate compliance with incompatible legacy rules. Atkins mentioned conditions such as periodic reporting, whitelist/verification pool control, and compliance token standards (e.g., ERC-3643). His proposed agenda includes: bringing cryptocurrency businesses back to the U.S. market, regulating on-chain finance in the U.S. market, and prioritizing commercial viability while maintaining investor protection.

Five, the SEC's new posture: adapting to the digital finance era

The Chairman of the SEC, Paul Atkins, announced the "encryption plan," which aims to adapt the agency to the digital financial era and establish clear regulatory guidelines for digital assets in the United States. Atkins stated that the encryption project is a direct response to the recommendations in a recent report from the President's Digital Asset Working Group.

Atkins proposed relaxing licensing rules to allow brokerage firms to offer multiple asset classes or tools under a single license, while creating a clear market structure that distinguishes the commodities associated with most cryptocurrencies from securities. Atkins stated that regulatory exemptions or grace periods should be provided for early crypto projects, initial token offerings, and decentralized software to allow these projects sufficient room for innovation without being crushed by litigation pressures or the fear of retaliation from the SEC.

In addition, the SEC Chairman stated that the cryptocurrency industry should not be forced to establish Decentralized Autonomous Organizations (DAOs) to circumvent regulation. He also stated that self-custody rights must be legally protected. Atkins wrote: "Many of the committee's legacy rules and regulations are outdated in the 21st century, let alone for the on-chain market. The committee must amend its rulebook to ensure that regulatory barriers do not hinder the progress and competition of new entrants and existing participants, thereby harming the interests of the general public." Equipping the U.S. Securities and Exchange Commission (SEC) with network capital markets and on-chain finance has always been a stated goal of the new SEC Chairman, as well as a way to consolidate the U.S.'s leadership position in the cryptocurrency space.

Conclusion:

The SEC's announcement of the "cryptocurrency project" plan marks an important step for the United States in cryptocurrency regulation. This plan aims to promote on-chain activities in the U.S. market through clear token definitions, simplified licensing processes, and innovative exemption mechanisms, rewriting the token rules. This will not only bring a clearer regulatory framework to the cryptocurrency industry but also solidify the United States' leadership in the global digital asset space.