SEC Launches Ambitious Plan to Make US Crypto-Friendly Again

The US Securities and Exchange Commission (SEC) is revamping its approach to regulating digital assets through Project Crypto, an initiative aimed at reversing years of companies relocating overseas due to regulatory uncertainty.

According to SEC Chairman Paul Atkins, American regulators lacked the will to foster innovation in the crypto space, driving many entrepreneurs abroad. He described the US as having 'basic fairness and common sense' in applying securities laws to digital assets, which he believes is key to making the country a leading global crypto hub.

The Project Crypto initiative aims to establish clear regulatory boundaries by using the traditional Howey test framework for token classification. This will replace the previous 'regulation by enforcement' approach, where companies had to wait for legal action before determining compliance obligations.

The initiative also proposes regulatory carve-outs for certain crypto activities, including airdrops and network incentives such as staking rewards. New businesses can operate in the US if they report to the SEC regularly, use verified user pools, and build safety rules into their tokens using systems like ERC-3643.