The SEC used to be crypto’s sworn enemy,
stifling innovation at every turn. However, this is no longer the case. The SEC has
done a complete 180 and is now actively encouraging crypto innovation. And just recently,
the SEC unveiled Project Crypto, a groundbreaking initiative that could bring the entire financial
system on chain. And that’s why today we’re going to do a deep dive into project crypto, telling you
what it’s all about, which cryptos could benefit, and how it could impact the crypto market. My
name is Nick, and you’re watching the Coin Bureau. Before we begin, you need to know that I am not a
financial adviser and nothing in this video should be considered financial or investment advice. This
video is purely educational and intended to inform you about the SEC’s recent crypto regulation
plans. And if you want more content like this, then why not punch those like and subscribe
buttons and drop kick that notification bell too so you don’t miss our next one. Now, crypto’s
regulatory backdrop has been growing steadily more bullish since the start of the year. The biggest
reason for this has been the Securities and Exchange Commission or SEC, which is becoming
more crypto friendly by the day. But it’s easy to forget that not too long ago, the SEC’s
attitude towards crypto was very different. Now, to bring you up to speed, the SEC’s responsibility
is to regulate securities like stocks and bonds. Under the reign of former chairman Gary Gensler,
the SEC consistently asserted that almost every cryptocurrency was an unregistered security
except for Bitcoin, which was the only crypto that Gensler publicly described as a commodity.
And against reign, the SEC explicitly labeled 69 cryptos as securities, including top altcoins
like BNB, Salana, Cardano, Near Protocol, Polygon, Algoran, Cosmos, and Filecoin. However, everything
changed when Gensler stepped down in January. Almost immediately, the remaining SEC staff
began reversing the regulators stance on crypto. Rather than opposing innovation, the regulators
started exploring ways to support the industry, beginning with dismissing multiple lawsuits filed
under Gensler’s reign. Steering the ship now is new SEC chairman Paul Atkins, who was nominated
by President Trump in December 2024 and was officially sworn into the role in April this year.
What’s truly mindblowing is that Atkins seems to have the complete opposite mindset to Gensler
when it comes to crypto regulation. And that’s because Atkins is hyperfocused on providing
something that crypto has been desperate for, regulatory clarity. According to him, the
SEC is now actively working on quote clear guidelines that market participants can use to
determine whether a crypto asset is a security. Hallelujah. To say that this is bullish would be
an understatement. For years, crypto projects have operated under the looming threat of a potential
lawsuit due to the SEC’s refusal to provide regulatory clarity. The resulting uncertainty
severely limited what many developers felt comfortable building as they feared triggering
regulatory scrutiny at any moment. Having clear, lenient regulations finally gives these projects
the freedom to innovate. And this new leniency shouldn’t be understated. To play devil’s
advocate, one could argue that many altcoins do in fact qualify as securities under the Howy
test. Not naming names, of course. However, the SEC’s new approach highlights just how lenient
it plans to be moving forward, offering a welcome sigh of relief to many projects and investors.
Now, to underscore the SEC’s shifting stance on crypto, current chairman Paul Atkins recently
delivered a speech unveiling quote project crypto, which outlines the AY’s approach moving forward.
We leave a link to the full speech in the description below. It’s well worth a watch if you
have the time. For now, though, here’s the key highlights. Atkins began by acknowledging that the
SEC’s playbook is outdated and called for revamped rules. Through Project Crypto, the SEC aims
to create a clear, modern framework that keeps crypto companies in the US instead of pushing them
overseas for friendlier regulations. To that end, the SEC plans to collaborate with other agencies
to implement recommendations from the President’s Working Group on digital asset markets report,
a 166page document with clear recommendations for agencies to create a regulatory framework
for crypto. Atkins described it as quote the blueprint to make America first in blockchain
and crypto technology. Anyway, Atkins revealed that project crypto will work towards five key
initiatives. The first of which involved bringing crypto asset distribution back to America. In his
words, quote, “The days of convoluted offshore corporate structures, decentralization theater,
and confusion over security status are over. Hallelujah. Hallelujah. He then delivered the
most bullish line of the entire speech. Quote, “Despite what the SEC has said in the past,
most cryptocurrencies or crypto assets are not securities.” [Music] Yeah. How do you like
them apples, Gary? Taste good, don’t they? Anyway, Atkins also said that he directed staff to
help crypto market participants easily identify if a crypto or transaction qualifies as a security
or investment contract. However, he did add that quote, “It should not be a scarlet letter to be
deemed a security. We need a regulatory framework for crypto asset securities that allows
these products to flourish.” He explained that many issuers prefer securities for their
flexibility while investors benefit from features like distributions and voting rights. Atkins then
turned to tokenized assets. He acknowledged that Wall Street and Silicon Valley are desperate for
tokenization and said the SEC will work closely with them to make it happen. And this is huge
news for cryptos focusing on tokenized realworld assets or RWAs. But more on that later. Now, a
second focus of the project crypto initiative is to modernize crypto custody regulations for
both self-custody and custodial intermediaries. Atkins explained, quote, I believe deeply
in the right to use a self-custodial digital wallet to maintain personal crypto assets and
participate in onchain activities like staking. And that reminds me, if you’re looking for the
best ways to trade and stake cryptocurrency, then that some investors still prefer to rely on SEC
regulated intermediaries to hold crypto on their behalf and said, quote, “It will be a priority
of my chairmanship to carry out the PWG’s report recommendations to modernize the SEC’s custody
requirements for registered intermediaries.” Notably, he said that market participants
shouldn’t be regulated for regulation’s sake. In his words, quote, “I’m in favor of affording
them the freedom to choose the most efficient regulatory framework for their business, provided
that framework adequately protects investors.” If you watched our previous videos on Paul Atkins,
you’ll know that this makes perfect sense because he’s an outspoken libertarian. He believes that
regulations should be minimal and the free market will self-regulate. And you can learn more about
the new SEC chair by checking out said video right over here. But back to project crypto. For its
third initiative, Atkins declared that quote, “A key priority of my chairmanship is to allow
market participants to innovate with super apps. Put simply, regulators will work together to
create a unified framework, letting intermediaries offer multiple products and services under one
single license. Meanwhile, Project Crypto’s fourth initiative focuses on updating outdated
agency rules that cover both centralized and decentralized protocols benefiting US securities
markets, including heavily decentralized ones with a single operator. Regarding this initiative,
Atkins added that the SEC should protect code publishers, distinguish between intermediated and
disintermediated activity, and integrate DeFi and onchain protocols into America’s markets instead
of excluding them with needless regulations. And finally, Project Crypto’s fifth initiative
is to create a so-called innovation exemption, allowing new crypto projects and businesses to
launch without first needing full compliance with outdated or incompatible rules. To be clear,
the SEC will still enforce key conditions, but projects will mainly follow principle-based
guidelines that meet the core policy aims of federal securities laws. Notably, Atkins outlined
that these principles could include periodic SEC reports, whitelisting or verified pool functions,
and restricting tokenized securities that lack features that integrate compliance features such
as ERC 3643, Ethereum’s token standard for RWA tokenization. So then, Project Crypto sounds very
bullish indeed. But the question now is how long will it take to be fully implemented? Well, while
the current SEC is working fast to undo the damage caused by Atkins predecessor, sadly this doesn’t
mean that everything will change overnight. The new SEC chairman will have to navigate through
multiple challenges. Uh perhaps the biggest challenge in the short term is that the SEC is
trying to establish new rules whilst at the same time Congress is actively debating legislation
for crypto market structure. legislation that will determine how crypto is managed. And this could
be an issue because although the House has worked proactively to pass crypto bills and introduce
clear regulations, the Senate has been a bit more of a mixed bag. As you may have guessed, some
of the less crypto friendly senators are already protesting the SEC’s laid-back approach, arguing
that it could lead to a new era of fraud and FTX- like collapses. Some analysts believe project
crypto will take years, not months, to roll out. Crypto lawyer Jake Shinsky, chief legal officer
at the Variant Fund, predicts about three and a half years for full implementation and urges the
crypto community to collaborate with the SEC to achieve lasting regulatory clarity. And this means
that project crypto would be completed by 2028. Now obviously this is a long time away especially
in crypto years which let’s face it ages us about 10 times faster than normal years do but u
the good news is that some changes and interim guidance will begin much sooner. The ACC plans to
provide exemptive relief and interpretive guidance in the coming months. So market participants will
see phased progress and early policy changes well before the final rollout is completed. And there
is also the chance that project crypto could be finalized much sooner than 2028. And that’s
simply because of how determined the current Trump administration has been to reshape the regulatory
landscape for crypto in the US so far. Remember, Trump is a politician who wants to impress and
retain voters. With the next presidential election in November 2028, he’ll likely want project crypto
wrapped up well before then, if only to brag about it during his campaign. But hey, we still have
a long way to go before then. So, uh, let’s not get too ahead of ourselves. Now, this begs the
question of which cryptos could benefit most from Project Crypto. The simple answer is most, if not
all. And that’s because as regulations improve and innovation thrives, more investors will enter the
market and also venture further out down the risk curve to find the most cuttingedge crypto projects
and protocols. That said, there are some crypto narratives that will benefit from project crypto
more than others, and it seems that the biggest one will be tokenized RWA. It’s clear that Paul
Atkins and the SEC are hyper aware of the demand for tokenized stocks, bonds, equities, and other
securities, and how these products could benefit the American economy. As such, tokenized RWA
cryptos could see serious institutional adoption once project cryptos regulations are ironed
out. And this includes cryptos like Ethereum, which holds the lion share in the RWA market at
around 54%. It also includes cryptos like ZK Sync ERA which has the second largest market share as
well as Aptos, Salana, Stella and Polygon to name but a few. But it’s not just RWA cryptos. The
announcement of project crypto also outlined a clear vision to create regulatory frameworks
that benefit any crypto narrative with lots of onchain activity. The elephant in the room
here is of course a defi which includes cryptos like hyperlquids hype unis swaps uni aveves uh a
and many more. It wouldn’t be too far-fetched to assume that some of the cryptos that could benefit
most will be those that have ties to members of the Trump administration and to Trump himself.
And this includes Bitcoin due to its use in the strategic Bitcoin reserve as well as various
altcoins included in the government’s digital asset stockpile. While the full list of cryptos in
the digital asset stockpile is currently unknown, we do know that it includes Ethereum’s ETH,
Salana’s Soul, Ripple’s XRP, and Cardano’s ADA, at least according to Trump’s posts. And of
course, Trump has a few crypto projects of his own that could benefit greatly from Project Crypto.
And these include World Liberty Financial, the DeFi protocol that’s backed by his sons. A USD1,
the stable coin issued by World Liberty Financial, could also see much wider use as a result. And
we’d be remiss not to mention the Trump memecoin, which could likewise see massive benefits as
crypto regulations in the US continue to improve, especially after the SEC declared that most
memecoins are not securities earlier this year. And this positions the Trump token for a potential
rally, but uh just don’t check what it looks like right now. You’ll be disappointed. Now, this is
all well and good, but what if things don’t go as smoothly as everyone thinks? In other words,
what could possibly go wrong? Well, as much as Project Crypto is bullish on paper, there is a
risk that it could end up being bearish. While project crypto aims to provide regulatory clarity
and support innovation in the crypto market, there are legitimate concerns that a significantly
relaxed regulatory approach would introduce new risks if not carefully managed. And these risks
include an increased potential for fraud, scams, and market manipulation, reminiscent of the wild
west scenario that regulation is meant to prevent. As such, one could argue that a better approach
would be to focus on a more balanced, phased, and coordinated regulatory framework,
one that still encourages innovation, but maintains investor protection and
ensures market integrity. Put simply, the SEC could opt to roll out new rules in
incremental, well-defined steps rather than taking its current approach of minimal oversight
and intervention. Naturally, this would mean that regulations would take longer to develop, but it
would likely leave less room for bad actors to harm investors and ensure any resulting crypto
rally is more sustainable. The caveat is that the SEC technically isn’t taking a completely
handsoff approach. Ultimately, they still have a job to do and will actively pursue bad actors
in the crypto space. This is something that SEC Commissioner Hester Pur has made perfectly clear.
If you watched our roundup of this year’s Bitcoin conference, you’ll know that Pur underscored that
while some people now seem to believe that they can safely engage in fraudulent activity, the
SEC will not hesitate to use its enforcement tools when clear rules are being violated. And in
case you missed this year’s Bitcoin conference, don’t worry. We’ve got a video on that right
over here. And if you want to learn about who could potentially replace Jerome Pal as the
new Fed chairman, we’ve got a video right here. Now, if you enjoyed today’s video, don’t forget
to subscribe and you can do that right over here. That’s all for me. Thank you guys very much for
watching and I will see you in the next video.
