Lawyer Breaks Down Project Crypto: SEC 3.5-Year Mandate To Let Crypto Flourish

Project Crypto, a sweeping mandate from Securities and Exchange Commission Chair Paul Atkins, signals the most ambitious push for regulatory clarity in history. This commission-wide initiative directs the entire SEC to update federal securities regulations, aiming to modernize outdated frameworks and enable America’s financial markets to move on-chain. It’s a bold move designed to foster innovation rather than stifle it, giving companies and investors long-awaited legal clarity.

Crypto Lawyer Jake Chervinsky, Chief Legal Officer at Variant Fund, has weighed in on this monumental development. Chervinsky emphasized that Project Crypto represents a rare opportunity to build a regulatory environment where crypto can flourish under thoughtful, transparent rules. Key focus areas include safe harbors for token issuance, authorization for custody and trading by SEC registrants, and frameworks for on-chain securities markets powered by DeFi protocols.

While the announcement itself doesn’t immediately change existing laws, it sets the stage for comprehensive rulemaking that could reshape the future of the digital asset industry in the United States. With a 3.5-year timeline to deliver results, the SEC faces an uphill task to get it done. However, many in the industry see Project Crypto as the foundational step toward cementing the US as a global crypto leader.

Chervinsky Outlines Key Goals For Project Crypto

Chervinsky shared a detailed thread on X, highlighting the transformative potential of Project Crypto, the SEC’s bold initiative to modernize securities regulations for the digital age. Chervinsky emphasized that Project Crypto is “everything you could want from an SEC that aims to promote rather than kill innovation.” Under Chair Paul Atkins’ leadership, the SEC is prioritizing this effort across all levels, signaling a shift towards fostering innovation rather than restricting it.

Chervinsky clarified that while the announcement doesn’t immediately change current laws, it instructs SEC staff to focus on critical areas: safe harbors for token issuance, authorization for custody and trading, and the development of on-chain securities markets powered by DeFi. A well-structured safe harbor would allow tokens to be created and distributed with clear guidelines, avoiding outdated securities laws. Disclosures, resale restrictions, and decentralization tests would form the foundation of this framework.

Authorization for broker-dealers and investment advisers to custody and trade crypto assets would massively expand market access, reversing prior restrictive policies. Chervinsky also pointed out that DeFi-powered on-chain securities markets are among the most exciting opportunities yet untapped due to regulatory barriers.

Project Crypto will require a formal rulemaking process—drafting proposals, public consultation, and issuing final rules. Chervinsky stressed the urgency, noting that once new products are launched, reversing them becomes significantly harder. Under Commissioner Hester Peirce’s guidance, the Crypto Task Force has laid the groundwork, and now, Project Crypto represents the next crucial phase.

Chervinsky concluded that while this process will take years, not months, the crypto community must actively support and collaborate with the SEC to ensure Project Crypto delivers lasting regulatory clarity, paving the way for the US to lead in crypto innovation.

Altcoin Market Cap Analysis: Testing Support After Sharp Rejection

The total crypto market cap excluding Bitcoin (TOTAL2) has experienced a sharp 8.41% correction, dropping to $1.39 trillion after reaching a local high of $1.55 trillion. This rejection comes after weeks of sustained bullish momentum that saw altcoins rally aggressively. The chart shows that TOTAL2 is testing the 50-day moving average (1.15T) as a key support level, while the 100-day MA (1.01T) remains a strong structural floor.

Despite the recent selloff, the broader uptrend remains intact. The market cap is still well above the 200-day MA (882B), which continues to slope upwards, signaling a healthy long-term bullish structure. However, the breakdown from the $1.5T resistance highlights growing uncertainty in the altcoin sector as investors reassess market conditions.

Volume has surged during the correction, indicating significant selling activity. Analysts will closely watch if the $1.35T–$1.4T range holds as a demand zone. If bulls can stabilize above this range, the market could consolidate before attempting another breakout. Conversely, losing this level would expose TOTAL2 to further downside, potentially targeting the $1.2T area as the next major support.

Featured image from Dall-E, chart from TradingView