Paul Atkins, SEC Chairman, stated that many digital tokens are not securities and proposed allowing integrated platforms that offer trading, staking, and lending within a clear regulatory framework. These ideas are part of Project Crypto, a public initiative seeking to change rules and reduce regulation by enforcement. The stated goal is to provide legal certainty to projects and platforms and reduce litigation related to token classification.
Statements and Context
Atkins emphasized the distinction between utility tokens and tokens that pursue centralized profits, suggesting that only a few assets should be considered securities under tests like the Howey Test. This approach contrasts with prior interpretations and aims to offer greater legal certainty to projects and platforms, reducing litigation and the unclear regulatory environment.
Project Crypto and Custody Modernization
Project Crypto proposes adapting rules to tokenized assets, with special focus on the custody rule, exploring ways for platforms to provide regulated custody without preventing self-custody. The goal is to balance investor protection with flexible custody options, addressing aspects like asset segregation and oversight.
Super-Apps — Functional Design and Operational Framework
The concept of super-apps is to combine multiple crypto services in a single interface supervised with governance, auditing, and asset segregation, including regulated custodians and the ability for users to control their keys when technical and regulatory safeguards are in place. The design seeks to merge accessibility and oversight to enable services like trading, staking, and lending.
Benefits and Risks for the Ecosystem
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Regulatory Clarity: Clear rules reduce uncertainty for projects with utility tokens, facilitate the offering of regulated financial products, and can lower litigation and attract investment.
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Adoption Boost: Super-apps make DeFi and crypto services accessible to non-technical users by simplifying interfaces and combining services in a single entry point, accelerating mass adoption.
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Concentration Risk: Integrating multiple services increases dependence on custodians or platforms, potentially creating centralized points of failure and systemic risks. Implementation must mitigate power concentration.
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Sovereignty Preservation: Effectiveness depends on rules allowing true self-custody and transparent governance, ensuring regulatory openness does not erode users’ financial sovereignty. Transparency and technical safeguards will be key.
Conclusion
The SEC’s shift in tone could open a period of greater certainty for the crypto economy if Project Crypto and custody reforms are implemented with adequate controls. If proposals are formalized, many use-case tokens may not be considered securities, accelerating innovation and the offering of regulated products. The real impact will depend on technical details regarding custody, asset segregation, auditing, and supervision of super-apps, ensuring user protection while preserving decentralization.
