1/ PROJECT CRYPTO A mandate from the SEC Chair for the entire agency to update federal securities regulations so that crypto can flourish in the USA 🇺🇸 This is the start of the biggest push for regulatory clarity in crypto's history. The SEC has 3.5 years to make it a reality.

2/ Project Crypto is everything you could want from an SEC that aims to promote rather than kill innovation. Chair Atkins understands the opportunity to upgrade the financial system, and he's making sure all SEC staff at every level makes it a top priority. So what happens now?

3/ The announcement itself doesn't change anything in current law. It's an instruction for the staff to work on a handful of key issues, including: - a safe harbor for token issuance - authorization for crypto custody and trading - onchain securities markets powered by DeFi

4/ A safe harbor for token issuance would clarify how tokens can be created and distributed without tripping securities laws that don't make sense for crypto. A good safe harbor might include disclosures, resale restrictions, and a decentralization test:

5/ Authorization for SEC registrants like broker-dealers and investment advisers to custody and trade crypto will open up access for millions more people. Chair Gensler tried to “protect investors" by restricting their choice. Chair Atkins wants to do it with smart regulation.

6/ Onchain securities x DeFi is one of most exciting opportunities in crypto today. Securities haven't really moved onchain yet because regulation prevents them from being fully utilized in the decentralized environment of a public blockchain. It's time for the SEC to fix this.

7/ These are exactly the right areas of focus for the SEC to ensure that crypto has clarity in the USA. If done right, it will enable founders to generate value for both tokens and equity without fear of enforcement, just as @jessewldn and I explain here:

8/ How will Project Crypto get done? In formal rulemaking. To make sure these updates live beyond the current administration, the SEC will need to write proposals, seek notice and comment, and then issue final rules. This is a heavy lift. It will take time: years, not months.

9/ It won't happen overnight, but the SEC must move quickly on Project Crypto. The problem with rulemaking is that it can be reversed by the next administration. To avoid reversal, the rules must become effective ASAP. Once new products are live, they're much tougher to unwind.

10/ Under the leadership of @HesterPeirce, the Crypto Task Force has already done amazing work providing clarity for the industry. Project Crypto is the beginning of the next phase for the SEC. It's our responsibility to help the agency get it done as well and fast as possible.

11/ Founders should pay close attention to how Project Crypto develops at the SEC. There's nothing new or actionable yet, but there will be soon, and founders who know first will have an edge. If you're a founder and these issues matter to you, hit us up at @variantfund. [end]