SEC’s ‘Project Crypto’ Signals Major Policy Shift as Markets Tumble, Says Bernstein
While Friday’s crypto market downturn dominated headlines, a potentially game-changing regulatory development quietly unfolded, according to a Monday note from Wall Street firm Bernstein.
In what analysts described as the most progressive digital asset policy ever proposed by a sitting SEC chair, Chairman Paul Atkins unveiled “Project Crypto,” a sweeping initiative aimed at modernizing U.S. securities laws to support digital asset innovation.
A Turn Toward Innovation
Atkins’ remarks represent a dramatic shift from the SEC’s historically cautious approach to crypto. The initiative’s core goal is to reshape outdated regulatory frameworks and bring crypto businesses back onshore after years of being pushed overseas by legal uncertainty.
“Project Crypto is focused on reshoring,” Bernstein wrote, noting that the Commission plans to use its interpretive and exemptive powers to ease regulatory bottlenecks and encourage domestic innovation.
Redefining Digital Assets
In a stark departure from past SEC rhetoric, Atkins stated that most crypto assets do not qualify as securities, challenging the long-standing reliance on the Howey Test. He pledged to establish clearer definitions for digital assets across categories like commodities, stablecoins, collectibles, and governance-based tokens.
Bernstein said the initiative could resolve longstanding legal ambiguity and reignite capital formation in the U.S. crypto sector.
The Future of Tokenization
The plan also outlines a pathway toward tokenizing traditional financial instruments — including equities and bonds — with the goal of building the world’s largest tokenized securities market in the United States.
Wall Street institutions and leading tech firms are reportedly already engaged in the project, positioning the U.S. as a potential global hub for blockchain-based finance.
A Historic Inflection Point
Despite the market selloff, Bernstein emphasized that Project Crypto marks a critical regulatory inflection point that could reshape digital finance in the U.S.
“If executed, this vision positions the U.S. not just as a participant in the crypto economy—but as its global leader,” the firm concluded.
