“Project Crypto” opens to on‑chain markets

Project Crypto is the initiative presented by the SEC at the end of July 2025 to modernize the US crypto regulation: a framework that defines rules on tokens and on‑chain infrastructures, with rapid consultations and an operational roadmap already scheduled.

The declared objective is to make possible listing, exchange, and custody directly on blockchain with protections comparable to those of traditional markets (CNBC).

What is Project Crypto and what changes immediately

According to the official statement, https://www.sec.gov/about/sec-launches-project-crypto is a regulatory project dedicated to digital assets, with the aim of aligning securities regulations with digital finance and integrating on-chain processes within the perimeter of regulated markets. In this context, the goal is to achieve an infrastructure compatible with the standards already in use.

Key points in brief

• Start: end of July 2025, with an initial phase of listening and gathering comments.
• Objective: define standards for on‑chain markets (trading, settlement, custody) and a token classification consistent with securities law.
• Approach: distinction between token and “contractual package” of the offer, where the sales context and the promised rights are decisive.
• Next step: publication of request for comment on various technical dossiers, followed by the presentation of standard proposals.

According to the data collected by our regulatory analysis team and from discussions with market operators, in the first weeks after the announcement, technical tables on custody and interoperability have intensified.

Industry analysts observe that the pilot adoption could initially focus on a few large custodians and institutional venues, with regulatory sandbox experiences that will last several quarters before a wider spread.

The position on tokens: “the token is not (always) a security”

In his speech at the Wyoming Blockchain Symposium, Paul Atkins reiterated that “many tokens are not securities”, highlighting how the offering context and profit expectations remain key factors for legal qualification.

An interesting aspect is the consistency with the thesis “token ≠ security” supported by important policy groups, including the https://www.coincenter.org/the-token-is-not-the-security/, as well as referencing recent judicial decisions, such as in the Ripple case (Reuters).

Practical Classification Criteria

1. How the token is sold: for example, if third-party management is promised and expectations of returns are emphasized (applying the Howey test to the “package” offered).
2. What rights does it confer: economic flows, governance, access to services, and residual rights.
3. Role of intermediaries: in distribution, marketing, and managerial or promotional activities.

The outcome of the classification can range between utility token, governance token, and instruments that, in fact, operate as real investment offerings. It should be noted that an update of the interpretative guidelines is planned to reduce application ambiguities.

The framework for on-chain markets: from listing to custody

The project identifies the necessary pieces to integrate the market microstructure on‑chain within the regulated perimeter, while ensuring interoperability with legacy systems. In this context, operational continuity remains a pillar.

• Listing and trading: definition of requirements for on‑chain venues comparable to ATS/exchanges, with strict rules on transparency and best execution.
• Settlement: recognition of atomic settlement on‑chain, in contrast with the traditional T+1, and coordination with clearinghouse and finality standards (DTCC).
• Custody: definition of policy for segregation of assets, key management, insurance coverage, and on‑chain auditing (insights on custody practices: Crypto Custody Guide).
• Interoperability: creation of bridges between traditional markets and public/permissioned ledgers, with resilience and operational continuity requirements.

Indicative timeline (subject to consultations)

1. 0–3 months: collection of comments on the classification of tokens, on the requirements for on‑chain venues, and on custody policies.
2. 3–9 months: publication of rule proposals (NPRM) and opening of a public comment period.
3. 9–18 months: activation of pilot rules and experiments in sandbox with supervision; possible adoption of definitive rules during 2026.

Data and Expected Impacts: Efficiency, Costs, and Transparency

• Settlement efficiency: while the US markets have adopted the T+1 model already in 2024 (DTCC), on‑chain execution would allow for instant settlement with a reduction in counterparty risk. The transition from T+2 to T+1 has reduced the settlement window by 50% in terms of operational closing times.
• On-chain volumes: the transfers of stablecoin have reached volumes in the order of trillions of dollars annually, confirming a strong infrastructural demand (Artemis).
• Operating costs: the adoption of smart contracts and automated solutions could significantly reduce operations and reconciliation costs in corporate actions and collateral management.
• Transparency: the native auditability of exchanges and the traceability of on-chain positions will offer a higher level of transparency.

The reforms also aim to attract capitali istituzionali, providing legal certainty and paving the way for instruments such as ETF/ETP on‑chain, tokenizzazione di titoli, and pagamenti wholesale. In this sense, convergence with the standards of regulated markets will be decisive.

Reactions and Counterarguments

• Industry: entities like the Coin Center reiterate the need to distinguish between token and offering, considering the perimeter “token ≠ security” consistent in light of recent judicial evaluations.
• Associations: the Blockchain Association urges clear technical standards for custody and market structures, in order to avoid divergent interpretations.
• Congress: the bill FIT21 passed the House in 2024 and remains on the agenda in the Senate, highlighting the need for inter-agency coordination with the CFTC (Congress.gov).

Risks and open issues

• Regulatory arbitrage: divergences between jurisdictions could shift liquidity and risks outside the regulatory perimeter.
• Operational application: mapping the “package” of the offer in different use cases (utility vs. investment) remains a complex challenge.
• Compliance and AML: it is necessary to have a close integration with the rules on digital identity, travel rule, and on‑chain reporting.
• Institutional coordination: the correct alignment between the authorities — CFTC, FinCEN, and state ones — will be essential to avoid regulatory overlaps.

What to expect in 2025–2026

The implementation path will be gradual: consultations are ongoing, with regulatory drafts expected in the coming months and the experimentation of on‑chain pilot projects for trading and custody.

It should be noted that the definitive adoption of the new rules could materialize in 2026, in parallel with progress on the federal legislative front.

Conclusion

Project Crypto marks a shift in regulation: a framework that distinguishes the token from the offering and opens up to on‑chain markets with standards recognized by traditional operators. The challenge now will be to translate these principles into applicable rules, avoiding new gray areas without hindering innovation.

Related insights: MiCA Guide: what changes in the EU · Bitcoin ETF USA: flows and market implications

Source note: The publication of the full transcript of Paul Atkins’ speech at the Wyoming Blockchain Symposium is awaited. The SEC release on Project Crypto and the technical materials (RFC and drafts) will be integrated as soon as they are available (SEC). To contextualize the impact on the settlement cycle, see also the analysis of the transition to T+1 published by DTCC (update: status of publications on Project Crypto verified as of August 20, 2025).