Project Crypto: The SEC’s Regulatory Reboot for the Digital Asset Era
In the constantly shifting landscape of crypto regulation, clear leadership and forward-thinking policies are more essential than ever. On July 31, 2025, U.S. Securities and Exchange Commission (SEC) Chairman Paul S. Atkins delivered a landmark speech in Washington, D.C., unveiling Project Crypto, a bold, agency-wide initiative to modernize U.S. securities regulations for the digital asset era. Framed as a response to both global competition and a generational opportunity, the speech signaled a definitive shift in regulatory posture: toward enabling innovation, clarifying expectations, and restoring American leadership in crypto asset markets.
At StarCompliance (Star) we see this as more than a policy evolution. It is a call to action for compliance programs everywhere. We remain deeply committed to equipping our clients and the broader compliance community with the insights, tools, and technology they need to stay informed and ahead of change.
Here’s the top seven things you need to know.
1. A History of Innovation and a Mandate to Lead
Chairman Atkins opened by tracing market innovation back to the founding of the New York Stock Exchange (NYSE) and the 1960s “Paperwork Crisis.” Just as past leaders embraced technology to solve inefficiencies, the SEC today must meet blockchain innovation with regulatory clarity rather than fear.
Star’s Takeway: In moments of financial transformation, compliance must evolve too. Star’s Employee Compliance Solutions are future-ready with innovation, ensuring employees, no matter how markets change, remain within policy guardrails. Backed by more than 25 years of pioneering compliance technology, Star continues to help firms adapt with confidence and agility.
2. Enter ‘Project Crypto’
Atkins introduced Project Crypto as the SEC’s north star, an effort to modernize outdated rules and support President Trump’s goal of making the U.S. the ‘crypto capital of the world.’ From rethinking custody to supporting tokenized securities, Project Crypto lays the foundation for a blockchain-based financial future.
SEC Stance: The SEC is launching Project Crypto, a Commission-wide initiative to modernize securities regulation for blockchain-based markets. This marks a major pivot toward innovation-first regulation, with a focus on enabling U.S. leadership in digital finance.
Star’s Takeway: As firms expand into digital assets, they need compliance programs that deliver clear oversight across both traditional and emerging asset classes. Star’s Crypto Dealing Compliance Software provides that foundation with real-time monitoring, automated workflows, and intuitive tools that make it easy for employees to connect their trading accounts and wallets, eliminating manual back and forth and enabling fast, seamless pre-clearance.
3. Tokenization and Capital Formation Reimagined
Project Crypto emphasizes legal clarity, with new rules to distinguish between stablecoins, collectibles, securities, and commodities. Atkins envisions U.S.-based crypto offerings with clear disclosures and smart exemptions instead of regulatory ambiguity.
SEC Stance: The SEC will work with firms seeking to tokenize existing instruments (e.g., equity, bonds), enabling them to do so within the U.S. market and avoiding unnecessary reliance on offshore jurisdictions.
Star’sTakeway: With private investments and crypto offerings converging, firms need a robust way to track employee holdings, especially those outside traditional exchanges. Star’s Private Investments Compliance Solutions offer pre-clearance, disclosure, and update tools simplify compliance for both traditional and tokenized assets, reducing risk while supporting growth.
4. Custody, Choice, and Self-Sovereignty
The SEC aims to restore investor choice in how assets are held, whether self-custodied or via registered intermediaries. Existing custody rules, designed for paper certificates, will be retooled for digital assets.
SEC Stance: Chairman Atkins strongly supports self-custody for crypto holders and pledges to modernize custody rules for SEC registrants, allowing greater choice and reducing compliance uncertainty for custodians.
Star’s Takeaway: Whether held by an institution or in a cold wallet, employee-held crypto must be visible to compliance teams. Star helps firms globally map digital asset holdings to disclosure requirements, ensuring transparency and policy adherence in both centralized and decentralized environments.
Additional resources can be found in Star’s recent e-book Crypto Regulations Decoded which note only address changes at the SEC, but all takes a global look at key regulatory updates with EU’s MiCA, Dubai’s VARA, and the UK’s FCA.
5. Super-Apps and Seamless Experiences
The future of finance may be consolidated into “super-apps” that combine trading, custody, staking, and lending in one platform. The SEC will support this model through unified licensing and regulatory streamlining.
SEC Stance: Broker-dealers should be able to offer a full suite of services including trading in securities, crypto assets, staking, and lending – under one license. The SEC will seek to remove regulatory silos and overlapping licenses.
Star’s Takeaway: As employees interact with super-apps that blur traditional lines between securities and crypto, organizations need end-to-end surveillance and controls. The future-ready StarCompliance Enterprise ensures that employees and firms stay compliant regardless of how financial services are delivered. The platform services a wide range of employee compliance topics, from Crypto Dealing and Personal Account Dealing to Private Investments and Insider Trading Detection.
6. On-Chain Infrastructure and DeFi
Atkins advocated for regulatory room to accommodate decentralized systems like automated market makers. He committed to safeguarding innovation, even where intermediaries are not present.
SEC Stance: The SEC will update outdated rules to accommodate on-chain clearing, settlement, and trading systems, creating space for both centralized and decentralized models, removing friction for software-based financial activity.
Decentralized software systems, like automated market makers, will be accommodated in future rulemaking. The SEC will draw lines between intermediated and non-intermediated activity and avoid forcing regulation where it is not needed.
Star’s Takeaway: DeFi introduces new risks, including shadow trading, front-running, and exposure to MNPI via anonymous wallets. Star’s Firm Compliance solutions include:
- Compliance Control Room Software brings clarity and control to complex compliance workflows. Star’s solution simplifies communication, flags potential conflicts, and automates key tasks which connects employees, business units, and compliance in one centralized system.
- MNPI Management Software which monitors the flow of Material non-public information across a firm’s employee base, as well as key shareholders managing these risks whether activity occurs on-chain or off.
7. An Innovation Exemption for Rapid Deployment
A core policy shift includes an “innovation exemption,” allowing novel models to enter the market without years of regulatory delay, provided they meet principles-based standards.
SEC Stance: To encourage new business models, the SEC is considering a regulatory carve-out allowing projects to launch under a set of principles-based conditions rather than traditional rigid rules. This is intended to prioritize commercial viability without compromising investor protection.
Star’s Takeaway: Star has a global reputation for addressing and servicing policy and regulatory shifts quickly. Star’s flexible policy engines and real-time monitoring tools let firms implement new rulesets quickly, enabling innovation while preserving oversight and accountability.
Conclusion: A New Chapter for American Markets
“We will not watch from the sidelines. We will lead.” Closing Statement – Chairman Atkins
With Project Crypto, the SEC isn’t just modernizing regulations—it is setting the stage for a new era in American finance. At Star, we believe that true leadership in financial innovation takes more than bold ideas. It requires strong corporate governance and forward-looking compliance programs.
For over two decades, Star has partnered with organizations to build scalable solutions that anticipate regulatory change. Our platform is designed for what comes next, anchored in clear objectives, powered by data-driven insights, and ready to support the future that Chairman Atkins envisions.
Momentum is growing. With recent legislative and executive support, including the GENIUS Act and the President’s Working Group Report, the SEC now has the mandate and framework to implement this transformation quickly and cohesively. Star is ready to lead alongside the compliance industry as it embraces the future.
To learn about Star’s complete suite of products from both Employee and Firm Compliance, schedule a personalized demo here.
Crypto Regulations Decoded
