On January 29, 2026, SEC Chairman Paul S. Atkins and CFTC Chairman Michael Selig jointly launched Project Crypto, a coordinated regulatory initiative designed to harmonize how the two agencies oversee digital asset markets. This event marked one of the most ambitious inter-agency collaborations on crypto oversight in decades.

At its core, Project Crypto reflects a recognition that modern crypto markets do not fit neatly into traditional jurisdictional silos. Activities like trading, clearing, custody, and risk management now span asset classes, technologies, and platforms, creating regulatory overlap and ambiguity that can deter innovation and burden compliance.

In launching Project Crypto, the SEC and CFTC emphasized a shared mission: reduce regulatory friction, harmonize definitions, and equip markets with clarity and confidence, even as Congress works toward broader federal crypto legislation.

Key Compliance Focus Areas Under Project Crypto

Regulated entities and in-house compliance teams should watch the following areas as regulators begin phasing in harmonized standards:

• Unified Asset Taxonomy: One major aim of Project Crypto is to develop shared definitions for digital assets clarifying when a token is treated as a security versus a commodity or other digital instrument. Clear classification will reduce legal ambiguity for issuers and intermediaries.

• Jurisdictional Clarity: Firms can expect guidance on which activities fall under SEC oversight and which fall under CFTC jurisdiction, reducing duplicative obligations and compliance costs.

• Reduced Overlap: Harmonized rules may streamline requirements for custody, trading, and reporting obligations that historically triggered dual regulatory compliance.

• Innovation Enablement: Regulators have signaled a desire to empower U.S. markets to host emerging digital products from tokenized collateral to decentralized finance (DeFi) arrangements subject to appropriate oversight.

Lessons from the Regulatory Trenches

Crypto companies and legal teams have seen firsthand how inconsistent guidance can stall deals or chill investment. For example, ambiguity around token status whether a token is deemed a security or commodity has delayed listings, complicated capital raises, and triggered enforcement actions. Clearer classification regimes under Project Crypto could reduce these risks for issuers and service providers.

In practice, harmonized regulation means firms can make better risk assessments, design compliant products, and articulate a defensible legal position when engaging investors, counterparties, and regulators.

Practical Compliance Strategies

To stay ahead of regulatory shifts under Project Crypto, crypto businesses should:

• Review Governance and Compliance Frameworks: Reevaluate internal policies to align with anticipated harmonized standards across the SEC and CFTC.

• Engage Regulatory Counsel Early: Legal advisors with expertise in both securities and commodities law can help interpret cross-agency guidance and mitigate exposure.

• Monitor Regulatory Developments: Regulators have committed to ongoing harmonization efforts that will evolve over months and years. Staying informed ensures proactive compliance rather than reactive fixes.

• Document Regulatory Interpretations: Maintain robust records of internal classification determinations, compliance policies, and regulatory engagements to withstand potential audits or inquiries.

Conclusion

Project Crypto represents a major shift in U.S. digital asset regulation from siloed oversight to coordinated governance. For crypto firms, regulatory harmonization isn’t just a policy milestone; it’s an operational imperative. By proactively aligning compliance strategies with emerging harmonized standards, companies can minimize legal risk, enhance investor confidence, and position themselves for long-term success in a maturing digital asset ecosystem.

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