Securities Commission Chairman Paul Atkins Announces Project Crypto, Endorsing Initial Coin Offerings, Airdrops, and Related Activities
The U.S. Securities and Exchange Commission (SEC) has announced Project Crypto, a transformative regulatory reform aimed at modernising U.S. securities laws for digital assets. The initiative, announced on July 31, 2025, is designed to foster innovation and establish the U.S. as a leader in blockchain and crypto markets.
Key aspects of Project Crypto include clarifying the regulatory treatment of various crypto-related activities, such as Initial Coin Offerings (ICOs), airdrops, network rewards, and Decentralised Finance (DeFi). The SEC aims to create clear, purpose-built guidelines and frameworks that distinguish which crypto assets are securities and which are not.
For securities, the SEC will design tailored disclosure requirements, exemptions, and safe harbours to support productive U.S.-based blockchain enterprises. Issuers and investors will gain clarity on how to classify new tokens, reducing regulatory uncertainty and facilitating onshore issuance. This includes fast-tracking the tokenization of traditional securities under a modernized regime.
Regarding airdrops and network rewards, while detailed rules are not yet fully laid out, Project Crypto’s clear classification system will allow participants to understand when such distributions may constitute securities offerings or are otherwise exempt. The initiative targets creating guidelines that consider the “economic realities” of these transactions, potentially exempting purely decentralised network rewards or airdrops from securities laws if there is no issuing entity promising returns.
Project Crypto marks a significant shift from prior SEC enforcement-heavy approaches towards regulatory relaxation and support for DeFi. DeFi protocols like Uniswap and Aave are viewed as enabling disintermediated finance and deserve institutional recognition. Developers who "just write code" will receive clearer protections and exemptions, while intermediaries providing services related to these protocols will have defined compliance pathways.
The initiative also addresses the treatment of unlicensed platforms for non-security crypto assets. Archaic regulatory rules that could stifle innovation for non-security assets will be revised or temporarily eased through interpretative or exemptive measures while formal regulations are being developed. This includes clearer rules for custody, trading, and distribution tailored to digital assets outside of traditional securities categories.
SEC Chair Paul Atkins has stated that under his leadership, the SEC will not stand idly by while innovations develop overseas, and the U.S. capital markets remain stagnant. Atkins' comments touched on DeFi, a long-standing issue for crypto industry leaders who argue that DeFi developers should not have to register with the SEC as intermediaries. The finer points of the plan touch on exemptions for crypto transactions subject to securities laws, the unregistered trading of crypto asset investment contracts, and the protection of decentralised software developers.
In summary, Project Crypto is positioning itself as a transformative, crypto-friendly regulatory overhaul that modernises guidelines around ICOs, airdrops, network rewards, and DeFi. It introduces clearer distinctions between securities and non-securities, favours innovation-supportive exemptions and safe harbours, and intends to bring crypto asset issuance and trading back to the U.S. regulatory perimeter with a more nuanced, flexible approach.
- The SEC's Project Crypto aims to establish the U.S. as a leader in the blockchain and crypto markets, clarifying the regulatory treatment of Initial Coin Offerings (ICOs), airdrops, network rewards, and Decentralised Finance (DeFi).
- The initiative will create guidelines that distinguish which crypto assets are securities and which are not, with tailored disclosure requirements, exemptions, and safe harbours for securities.
- For DeFi protocols like Uniswap and Aave, Project Crypto introduces clearer protections and exemptions, while intermediaries providing services related to these protocols will have defined compliance pathways.
- Regarding airdrops and network rewards, Project Crypto aims to exempt purely decentralized network rewards or airdrops from securities laws if there is no issuing entity promising returns.
- The SEC aims to revise or temporarily ease archaic regulatory rules that could stifle innovation for non-security assets, including clearer rules for custody, trading, and distribution tailored to digital assets outside of traditional securities categories.
- SEC Chair Paul Atkins has stated that under his leadership, the SEC will not let innovations develop overseas while the U.S. capital markets remain stagnant, intending to bring crypto asset issuance and trading back to the U.S. regulatory perimeter with a more nuanced, flexible approach.
