SEC Talks Crypto Clarity, Coordination, and Innovation Exemptions to Reshape Crypto Oversight

SEC leaders unveiled a coordinated push to integrate tokenized securities into U.S. markets, signaling innovation exemptions, safe harbors, and joint rulemaking with the CFTC to reshape crypto oversight.

SEC Accelerates Crypto Clarity Agenda With CFTC Coordination and Pro-Growth Innovation Exemptions

U.S. Securities and Exchange Commission (SEC) Chairman Paul S. Atkins and Commissioner Hester M. Peirce addressed crypto regulation at ETHDenver on Feb. 18, outlining plans for greater clarity, coordination, and potential exemptions aimed at integrating tokenized securities into U.S. markets.

“We will move forward with our regulatory work through Project Crypto, which is now a joint initiative with the CFTC,” Atkins stated. He noted that Mike Selig, whom Commissioner Peirce recruited to serve as Chief Counsel of the Crypto Task Force in his office, is now chairman of the Commodity Futures Trading Commission (CFTC). The SEC chairman continued:

“We are planning great things together – harmonization, joint rulemaking – a common, coordinated approach unlike anything seen before of these two, often sparring agencies.”

Project Crypto is a joint SEC-CFTC initiative to align digital asset regulation and reduce jurisdictional conflicts. It focuses on clear asset classifications, innovation safe harbors, guidance for tokenized real-world assets as collateral, and rules allowing platforms to offer both traditional and digital assets.

Atkins also detailed a possible framework for tokenized securities, explaining: “I would like to consider an innovation exemption to enable incumbents and crypto-native to experiment. For example, people trading certain tokenized securities through automated market makers, even though no one person or group of persons may be controlling that mechanism.” The SEC chairman opined:

“In my view, market participants should be able to engage with decentralized applications on public, permissionless blockchains if they desire.”

“But I expect, however, that many Americans will be more comfortable allowing intermediaries to custody and trade on their behalf. Individual investors, not the SEC, should make the decision. I also would like to consider whether there should be a safe harbor for participants who may be facilitating such trading,” he stressed. Atkins described the exemption as potentially temporary, with limits on trading volume and tailored relief from certain rules while the agency develops longer-term standards.

Peirce characterized the effort as incremental rather than transformative overnight, cautioning that expectations around an innovation exemption should remain measured. Both officials emphasized that regulators should focus on disclosure and market integrity rather than short-term price swings in bitcoin or other crypto assets. Atkins highlighted tokenization’s potential to shorten settlement cycles, streamline collateral movements, and modernize recordkeeping, while encouraging entrepreneurs to engage constructively with the agency as it develops a durable regulatory framework.

FAQ ⏰

• What is Project Crypto between the SEC and CFTC?

Project Crypto is a joint SEC and CFTC initiative aimed at harmonized rulemaking and coordinated crypto regulation.

• What is the proposed innovation exemption for tokenized securities?

The innovation exemption would allow limited experimentation with tokenized securities under tailored regulatory relief.

• Will the SEC allow trading of tokenized securities on decentralized applications?

Atkins said market participants should be able to engage with decentralized applications on public, permissionless blockchains if they choose.

• How does the SEC view bitcoin price swings in regulation?

SEC officials said oversight should prioritize disclosure and market integrity over short-term bitcoin price movements.