In remarks at ETHDenver, U.S. Securities and Exchange Commission Chair Paul S. Atkins, joined by Commissioner Hester M. Peirce, outlined a pipeline of potential Commission and staff actions intended to provide greater regulatory clarity for crypto assets and tokenized securities under “Project Crypto”, now described as a joint initiative with the Commodity Futures Trading Commission. Atkins said the SEC could consider a Commission framework explaining when a crypto asset involves an investment contract, including how an investment contract is formed and terminated. He also flagged a potential “innovation exemption” to facilitate limited trading of certain tokenized securities on novel platforms, alongside possible rulemaking to create “common-sense pathways” for capital raising tied to crypto asset sales, additional no-action letters and exemptive orders (including for wallets and other user interfaces that are not subject to Exchange Act registration), rulemaking on broker-dealer custody of non-security crypto assets including payment stablecoins, and a transfer agent modernization rulemaking to accommodate blockchain-based recordkeeping. On the innovation exemption concept, Atkins described a temporary, volume-limited approach that could provide relief from requirements deemed less relevant for onchain trading, potentially allowing tokenized securities to trade in automated market makers or other decentralized liquidity venues subject to a buyer and seller whitelisting process and possible safe harbor treatment for facilitators. The remarks framed the items as work to be taken up over the coming weeks and months, alongside continued engagement with Congress and coordination with the CFTC, and Atkins invited feedback on the proposed innovation exemption approach.

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