SEC Focuses on Transparency to Encourage Growth in Crypto Innovation

The U.S. Securities and Exchange Commission (SEC) has taken a significant turn in its digital asset policy, with Commissioner Hester Peirce—often referred to as “Crypto Mom”—offering an unusually conciliatory address at the Coin Center Dinner on September 25, 2025. During her remarks, Peirce recognized the agency’s previously tough enforcement stance toward the crypto sector and voiced regret over not convincing her fellow regulators to embrace a more open-minded approach sooner. “I regret that for much of my time at the SEC, I was unable to persuade my peers in government to give you an opportunity,” she said, marking a clear shift from the agency’s earlier combative rhetoric. Peirce noted that the present regulatory transparency, shaped by efforts like the SEC’s Crypto Task Force and “Project Crypto,” could enable innovators to create solutions that boost safety, security, and growth in the digital asset industry Crypto Gets an Apology: SEC Finally Changes Its Tune [ 1 ].

This new direction mirrors broader reforms under SEC Chair Paul Atkins, who succeeded Gary Gensler, known for his administration’s focus on enforcement and broad categorization of most cryptocurrencies as securities. With Atkins at the helm, the SEC has adopted a more balanced regulatory approach, dismissing several cases against crypto companies and launching Project Crypto to update digital asset regulations. The project seeks to clarify the rules for tokenized assets, custody protocols, and trading standards, all while encouraging innovation. “The SEC’s mission is to protect markets that foster human ingenuity and talent for the benefit of all,” Atkins said in a July 31 speech, describing the agency’s new priorities as “clarity instead of uncertainty” and “infrastructure that matches the realities of crypto” Project Crypto: SEC Chair Promises Clarity, Ends Regulation by Enforcement [ 4 ].

Among the most notable changes is the SEC’s move to narrow its definition of securities as it relates to digital assets. Atkins made it clear that “most crypto assets are

securities,” a significant departure from the broader interpretation of previous leadership. This adjustment could ease compliance requirements for projects that don’t fit traditional securities models, potentially spurring domestic innovation and encouraging crypto businesses that had moved abroad to return to the U.S. The SEC has also issued interpretive guidance on liquid staking, clarifying that some protocol-native, non-custodial staking mechanisms may not be considered securities under the Howey test .

Peirce’s remarks also addressed the SEC’s changing perspective on non-fungible tokens (NFTs). Earlier enforcement actions against NFT projects had created confusion in the industry. In a playful reference to this, Peirce suggested a satirical NFT series called “The Dog’s Breakfast,” featuring cartoon versions of crypto personalities, including herself as “CryptoMom” and a fictional attorney named “Lost-in-Law.” This lighthearted suggestion reinforced her broader call for collaboration, encouraging the sector to use the current regulatory clarity to deliver “genuine value” to users Crypto Gets an Apology: SEC Finally Changes Its Tune [ 1 ].

The SEC’s policy transformation has practical consequences beyond just rhetoric. By focusing on “rapid advancement” in regulatory reform, the agency aims to establish the U.S. as a frontrunner in blockchain-based finance. Project Crypto includes plans for “super-apps” that would allow trading of both securities and non-securities within a unified regulatory framework, helping to reduce fragmentation and lower compliance expenses. The SEC has also approved in-kind redemptions for crypto exchange-traded products (ETPs), bringing them in line with traditional commodity ETPs and improving market efficiency. These measures represent a deliberate effort to integrate blockchain systems into the wider financial landscape while supporting innovation .

Although many in the crypto industry have welcomed the SEC’s revised approach, some challenges persist. Critics, including consumer protection advocates, caution that loosening regulations could heighten the risk of fraud, echoing the concerns that surfaced after the 2022 FTX collapse. Nevertheless, the agency has highlighted protective measures, such as modernizing custody practices and working closely with the President’s Working Group on Financial Markets. As Congress continues to debate comprehensive crypto laws, the SEC’s forward-looking framework could become a blueprint for balancing investor safety with technological progress .