SEC Chair Paul Atkins said the agency has “enough authority to drive forward” a comprehensive crypto rulemaking programme aimed at delivering formal proposals in 2026. His remarks frame a shift under “Project Crypto” toward proactive rulemaking, including an innovation exemption expected in January 2026, with implications for issuers, trading venues and custodians.
Atkins launched a Commission-wide initiative, Project Crypto, in mid‑2025 to modernize securities regulation for digital assets and reduce reliance on enforcement as the primary regulatory tool. The initiative maps a pathway from staff guidance to formal rule proposals, with plans to amend existing statutory and market‑structure rules to integrate on‑chain trading and tokenized instruments into national exchange frameworks. Atkins said the SEC will move from ad hoc enforcement to codified rules, and the agency expects to publish targeted rule proposals during 2026.
A central feature of the agenda is an “innovation exemption” designed to create a regulated sandbox for novel crypto business models; the exemption is expected to be implemented in January 2026. An innovation exemption is a limited regulatory relief mechanism allowing firms to test products under defined conditions while retaining investor protections.
Concurrently, the Commission is developing a token taxonomy to categorise digital assets and clarify which tokens typically fall outside securities law. Atkins declared in August 2025 that “most crypto assets are not securities,” and SEC staff have signalled that certain stablecoins, proof‑of‑work mining activities and some staking arrangements will often sit outside the securities perimeter.
The agency also rescinded Staff Accounting Bulletin 121 in September 2025, a step that removed a key accounting barrier for institutional custody and may facilitate wider adoption of regulated custody services.
Exemptions, taxonomy and custody changes for SEC programm
The planned rule changes aim to ease the process for crypto firms seeking listings and reduce protracted litigation risk by offering clearer compliance pathways. Firms should expect amendments to reporting and listing rules under the Securities Exchange Act of 1934 that would allow more on‑chain activity to operate within existing U.S. markets.
Market participants — issuers, exchanges, custodians and institutional investors — are likely to face a transition that emphasises engagement with rulemaking and the public comment process. Short term, the rescission of SAB 121 could accelerate custody solutions from regulated intermediaries; longer term, a formal token taxonomy and targeted exemptions should change product design, disclosures and licensing strategies.
Atkins’s timetable pivots the SEC toward rulemaking with concrete milestones: an innovation exemption slated for January 2026 and broader rule proposals across 2026.
