SEC Chair Atkins Unveils “Challenge Crypto” to Modernize US Securities Regulation

by Jeremy Moorehouse, Zachary Goldman, Benjamin Neaderland, and Matthew Beville

Left to proper: Jeremy Moorehouse, Zachary Goldman, Benjamin Neaderland, and Matthew Beville (pictures courtesy of WilmerHale)

On July 31, 2025, SEC Chairman Paul Atkins delivered a significant coverage tackle on the America First Coverage Institute in Washington, D.C., unveiling “Challenge Crypto”—a Fee-wide initiative to modernize securities regulation in help of President Trump’s imaginative and prescient of america because the “crypto capital of the world.” Framing the second as a defining alternative for American management in digital finance, Atkins outlined a regulatory agenda centered on integrating “on-chain” (on blockchain expertise) software program techniques into US markets, enabling decentralized finance, and launching a brand new “innovation exemption” to speed up the industrial deployment of novel applied sciences. His remarks sign a big shift towards a extra versatile regulatory posture that might form the way forward for the US digital asset marketplace for years to return.

To safe US management within the digital finance period, Atkins unveiled Challenge Crypto as a Fee-wide initiative to modernize securities guidelines and rules to allow America’s monetary markets to maneuver on-chain. Atkins highlighted the GENIUS Act and Congress’s ongoing efforts to move market construction laws and described the President’s Working Group on Digital Asset Markets (PWG) Report as “the blueprint to make America first in blockchain and crypto expertise.” Rejecting the prior “regulation-by-enforcement” method, Atkins dedicated to reshoring crypto companies and directed Fee employees to:

• Draft clear guidelines for the distribution, custody, and buying and selling of crypto property, topic to public discover and remark.
• Collaborate with the Crypto Process Power to swiftly develop rule proposals aligned with the PWG Report’s suggestions.
• Think about using interpretative, exemptive and different authorities to make sure that outdated guidelines don’t hinder innovation and entrepreneurship in America.

Atkins introduced that he has directed SEC employees to develop a complete regulatory framework to convey crypto asset distributions again to the US in an effort to remove reliance on offshore constructions and supply authorized readability for innovators. Particularly, he mentioned he instructed SEC employees to:

• Draft clear pointers for figuring out whether or not a crypto asset is a safety or topic to an funding contract.
• Suggest tailor-made disclosures, exemptions, and secure harbor mechanisms for crypto asset securities, together with preliminary coin choices, airdrops, and community rewards.
• Work immediately with corporations searching for to tokenize conventional securities to facilitate their distribution inside US markets.

Atkins emphasised his view that the majority crypto property are usually not securities and that being categorized as a safety shouldn’t be a deterrent to improvement. He expressed help for crypto asset securities that supply options like voting rights and distributions. Atkins additionally rejected the necessity for untimely decentralization or offshore structuring and advocated as a substitute for a regulatory surroundings that encourages innovation and consists of American buyers.

Atkins careworn that market contributors will need to have “most selection” in how they custody and commerce crypto property. He reaffirmed his robust help for self-custody, calling it a “core American worth,” whereas recognizing that many buyers will proceed to depend on SEC-registered intermediaries like broker-dealers and funding advisers.

To deal with this and implement the PWG Report’s advice to modernize the SEC’s custody guidelines, Atkins directed SEC employees to judge the way to adapt the present custody regime to accommodate crypto property, together with by exemptive reduction and potential rule adjustments. He additionally referred to as for permitting market contributors to function throughout a number of enterprise traces below probably the most environment friendly licensing construction doable and expressed help for regulatory flexibility that protects buyers with out imposing pointless burdens.

Atkins recognized enabling “super-apps” as a key precedence of his chairmanship. He outlined them as platforms that permit securities intermediaries to supply a variety of providers—together with buying and selling in crypto asset securities, non-security crypto property, crypto providers (equivalent to asset “staking”), and conventional securities—below a single license. He asserted that the federal securities legal guidelines don’t prohibit SEC-registered venues from itemizing non-securities at this time. Accordingly, Atkins directed SEC employees to:

• Develop steerage and proposals to help the super-app mannequin.
• Develop a framework permitting side-by-side buying and selling of crypto asset securities and non-security crypto property on SEC-regulated platforms.
• Consider using Fee authority to allow sure non-security crypto property to commerce on non-registered venues, together with state-licensed and CFTC-regulated platforms.

Atkins additionally referred to as on the SEC and different regulators, according to the PWG Report, to streamline licensing constructions and keep away from duplicative regulatory burdens, emphasizing the significance of regulatory effectivity and competitors.

Atkins directed SEC employees to replace outdated guidelines and rules to help the mixing of on-chain software program techniques into US securities markets. He defined that these techniques differ in construction—some are absolutely decentralized and function with out intermediaries, whereas others have identifiable operators. Each fashions, he emphasised, needs to be accommodated inside the regulatory framework. Atkins careworn the significance of enabling decentralized techniques, equivalent to automated market makers, which facilitate non-intermediated monetary exercise. He famous that whereas federal securities legal guidelines have historically assumed the presence of intermediaries, regulation shouldn’t impose intermediaries the place markets can operate with out them.

Atkins additionally said that the SEC will work to guard pure publishers of software program code, make clear the excellence between intermediated and disintermediated exercise, and set up sensible guidelines for intermediaries working on-chain. These techniques, he mentioned, shouldn’t be stifled by duplicative or pointless regulation. Atkins acknowledged that to implement this imaginative and prescient, rule adjustments could also be vital, together with potential amendments to Regulation NMS to accommodate tokenized securities buying and selling.[1]

Atkins concluded by calling for a extra versatile regulatory posture that prioritizes industrial viability. He proposed a brand new “innovation exemption” to permit novel enterprise fashions and applied sciences to enter the market shortly, even when they don’t match neatly inside present SEC guidelines. This exemption could be principles-based, requiring compliance with core aims of federal securities legal guidelines with out imposing inflexible or incompatible necessities.

Atkins advised that circumstances below the exemption may embrace periodic reporting, use of whitelisting or “verified pool” performance—which limit transactions to pre-approved, compliant contributors—and limitations on tokenized securities that don’t adjust to requirements like ERC-3643, which embeds options equivalent to identification verification and switch restrictions. He emphasised that each SEC employees and market contributors ought to consider new fashions with a watch towards sensible implementation and market readiness.

Atkins’s speech marks a significant shift within the SEC’s method to digital property. With the launch of “Challenge Crypto,” the Fee is shifting towards a proactive regulatory framework geared toward making the US a world chief in blockchain finance. Whereas steerage, rulemaking and the “innovation exemption” are nonetheless underway, a federal pathway for the blockchain business is turning into obvious. Market contributors ought to actively monitor key developments (together with the GENIUS Act, the PWG Report, and market construction laws), take into account participating immediately with the Crypto Process Power, and assessment their enterprise construction, merchandise, and compliance packages to place themselves for this new regulatory framework.[2]

[1] Atkins individually addressed questions on Regulation NMS and whether or not amendments could also be vital to handle its utility within the conventional securities markets. See SEC Proclaims Roundtable on Commerce-Via Prohibitions (July 21, 2025), https://www.sec.gov/newsroom/press-releases/2025-99-sec-announces-roundtable-trade-through-prohibitions.

[2] Along with the contributors listed under Tiffany Smith, Daniel LaMagna, Michael Sise, Cole Steinberg, and Sofia Schonenberg additionally offered useful help within the assessment and drafting course of. 

Jeremy Moorehouse, Zachary Goldman, Benjamin Neaderland and Matthew Beville are Companions at WilmerHale. This submit first appeared on the agency’s weblog.

The views, opinions and positions expressed inside all posts are these of the creator(s) alone and don’t symbolize these of the Program on Company Compliance and Enforcement (PCCE) or of the New York College Faculty of Regulation. PCCE makes no representations as to the accuracy, completeness and validity or any statements made on this website and won’t be liable any errors, omissions or representations. The copyright of this content material belongs to the creator(s) and any legal responsibility as regards to infringement of mental property rights stays with the creator(s).

by Jeremy Moorehouse, Zachary Goldman, Benjamin Neaderland, and Matthew Beville

Left to proper: Jeremy Moorehouse, Zachary Goldman, Benjamin Neaderland, and Matthew Beville (pictures courtesy of WilmerHale)

On July 31, 2025, SEC Chairman Paul Atkins delivered a significant coverage tackle on the America First Coverage Institute in Washington, D.C., unveiling “Challenge Crypto”—a Fee-wide initiative to modernize securities regulation in help of President Trump’s imaginative and prescient of america because the “crypto capital of the world.” Framing the second as a defining alternative for American management in digital finance, Atkins outlined a regulatory agenda centered on integrating “on-chain” (on blockchain expertise) software program techniques into US markets, enabling decentralized finance, and launching a brand new “innovation exemption” to speed up the industrial deployment of novel applied sciences. His remarks sign a big shift towards a extra versatile regulatory posture that might form the way forward for the US digital asset marketplace for years to return.

To safe US management within the digital finance period, Atkins unveiled Challenge Crypto as a Fee-wide initiative to modernize securities guidelines and rules to allow America’s monetary markets to maneuver on-chain. Atkins highlighted the GENIUS Act and Congress’s ongoing efforts to move market construction laws and described the President’s Working Group on Digital Asset Markets (PWG) Report as “the blueprint to make America first in blockchain and crypto expertise.” Rejecting the prior “regulation-by-enforcement” method, Atkins dedicated to reshoring crypto companies and directed Fee employees to:

• Draft clear guidelines for the distribution, custody, and buying and selling of crypto property, topic to public discover and remark.
• Collaborate with the Crypto Process Power to swiftly develop rule proposals aligned with the PWG Report’s suggestions.
• Think about using interpretative, exemptive and different authorities to make sure that outdated guidelines don’t hinder innovation and entrepreneurship in America.

Atkins introduced that he has directed SEC employees to develop a complete regulatory framework to convey crypto asset distributions again to the US in an effort to remove reliance on offshore constructions and supply authorized readability for innovators. Particularly, he mentioned he instructed SEC employees to:

• Draft clear pointers for figuring out whether or not a crypto asset is a safety or topic to an funding contract.
• Suggest tailor-made disclosures, exemptions, and secure harbor mechanisms for crypto asset securities, together with preliminary coin choices, airdrops, and community rewards.
• Work immediately with corporations searching for to tokenize conventional securities to facilitate their distribution inside US markets.

Atkins emphasised his view that the majority crypto property are usually not securities and that being categorized as a safety shouldn’t be a deterrent to improvement. He expressed help for crypto asset securities that supply options like voting rights and distributions. Atkins additionally rejected the necessity for untimely decentralization or offshore structuring and advocated as a substitute for a regulatory surroundings that encourages innovation and consists of American buyers.

Atkins careworn that market contributors will need to have “most selection” in how they custody and commerce crypto property. He reaffirmed his robust help for self-custody, calling it a “core American worth,” whereas recognizing that many buyers will proceed to depend on SEC-registered intermediaries like broker-dealers and funding advisers.

To deal with this and implement the PWG Report’s advice to modernize the SEC’s custody guidelines, Atkins directed SEC employees to judge the way to adapt the present custody regime to accommodate crypto property, together with by exemptive reduction and potential rule adjustments. He additionally referred to as for permitting market contributors to function throughout a number of enterprise traces below probably the most environment friendly licensing construction doable and expressed help for regulatory flexibility that protects buyers with out imposing pointless burdens.

Atkins recognized enabling “super-apps” as a key precedence of his chairmanship. He outlined them as platforms that permit securities intermediaries to supply a variety of providers—together with buying and selling in crypto asset securities, non-security crypto property, crypto providers (equivalent to asset “staking”), and conventional securities—below a single license. He asserted that the federal securities legal guidelines don’t prohibit SEC-registered venues from itemizing non-securities at this time. Accordingly, Atkins directed SEC employees to:

• Develop steerage and proposals to help the super-app mannequin.
• Develop a framework permitting side-by-side buying and selling of crypto asset securities and non-security crypto property on SEC-regulated platforms.
• Consider using Fee authority to allow sure non-security crypto property to commerce on non-registered venues, together with state-licensed and CFTC-regulated platforms.

Atkins additionally referred to as on the SEC and different regulators, according to the PWG Report, to streamline licensing constructions and keep away from duplicative regulatory burdens, emphasizing the significance of regulatory effectivity and competitors.

Atkins directed SEC employees to replace outdated guidelines and rules to help the mixing of on-chain software program techniques into US securities markets. He defined that these techniques differ in construction—some are absolutely decentralized and function with out intermediaries, whereas others have identifiable operators. Each fashions, he emphasised, needs to be accommodated inside the regulatory framework. Atkins careworn the significance of enabling decentralized techniques, equivalent to automated market makers, which facilitate non-intermediated monetary exercise. He famous that whereas federal securities legal guidelines have historically assumed the presence of intermediaries, regulation shouldn’t impose intermediaries the place markets can operate with out them.

Atkins additionally said that the SEC will work to guard pure publishers of software program code, make clear the excellence between intermediated and disintermediated exercise, and set up sensible guidelines for intermediaries working on-chain. These techniques, he mentioned, shouldn’t be stifled by duplicative or pointless regulation. Atkins acknowledged that to implement this imaginative and prescient, rule adjustments could also be vital, together with potential amendments to Regulation NMS to accommodate tokenized securities buying and selling.[1]

Atkins concluded by calling for a extra versatile regulatory posture that prioritizes industrial viability. He proposed a brand new “innovation exemption” to permit novel enterprise fashions and applied sciences to enter the market shortly, even when they don’t match neatly inside present SEC guidelines. This exemption could be principles-based, requiring compliance with core aims of federal securities legal guidelines with out imposing inflexible or incompatible necessities.

Atkins advised that circumstances below the exemption may embrace periodic reporting, use of whitelisting or “verified pool” performance—which limit transactions to pre-approved, compliant contributors—and limitations on tokenized securities that don’t adjust to requirements like ERC-3643, which embeds options equivalent to identification verification and switch restrictions. He emphasised that each SEC employees and market contributors ought to consider new fashions with a watch towards sensible implementation and market readiness.

Atkins’s speech marks a significant shift within the SEC’s method to digital property. With the launch of “Challenge Crypto,” the Fee is shifting towards a proactive regulatory framework geared toward making the US a world chief in blockchain finance. Whereas steerage, rulemaking and the “innovation exemption” are nonetheless underway, a federal pathway for the blockchain business is turning into obvious. Market contributors ought to actively monitor key developments (together with the GENIUS Act, the PWG Report, and market construction laws), take into account participating immediately with the Crypto Process Power, and assessment their enterprise construction, merchandise, and compliance packages to place themselves for this new regulatory framework.[2]

[1] Atkins individually addressed questions on Regulation NMS and whether or not amendments could also be vital to handle its utility within the conventional securities markets. See SEC Proclaims Roundtable on Commerce-Via Prohibitions (July 21, 2025), https://www.sec.gov/newsroom/press-releases/2025-99-sec-announces-roundtable-trade-through-prohibitions.

[2] Along with the contributors listed under Tiffany Smith, Daniel LaMagna, Michael Sise, Cole Steinberg, and Sofia Schonenberg additionally offered useful help within the assessment and drafting course of. 

Jeremy Moorehouse, Zachary Goldman, Benjamin Neaderland and Matthew Beville are Companions at WilmerHale. This submit first appeared on the agency’s weblog.

The views, opinions and positions expressed inside all posts are these of the creator(s) alone and don’t symbolize these of the Program on Company Compliance and Enforcement (PCCE) or of the New York College Faculty of Regulation. PCCE makes no representations as to the accuracy, completeness and validity or any statements made on this website and won’t be liable any errors, omissions or representations. The copyright of this content material belongs to the creator(s) and any legal responsibility as regards to infringement of mental property rights stays with the creator(s).