Commissioner Atkins recently made the following speech. "American Leadership in the Digital Finance Revolution" https://www.sec.gov/newsroom/speeches-statements/atkins-digital-finance-revolution-073125 How could this affect Regulation Crowdfunding?
If the SEC follows through on the vision in this speech, it could have major knock-on effects for Regulation Crowdfunding (Reg CF) in several ways—particularly if crypto assets and tokenization become integrated into mainstream U.S. securities markets.
Here’s the likely impact broken down:
1. Tokenized Securities Could Become Reg CF Norm
Current situation: Reg CF offerings are mostly traditional equity, debt, or SAFE instruments. Tokenized securities are rare due to unclear SEC guidance, high compliance costs, and custody/trading constraints.
Speech effect: If “Project Crypto” delivers clear, purpose-fit disclosure rules and exemptions for tokenized securities—and allows them to trade on-chain—issuers could easily offer tokenized shares or revenue-sharing tokens under Reg CF.
Impact:
- Faster, cheaper secondary trading of Reg CF securities.
- Greater retail investor appeal due to liquidity potential.
- Easier fractionalization of ownership, making micro-investments practical.
2. Clear Rules for Crypto Asset Securities Could Expand Issuer Types
Current situation: Blockchain startups often avoid Reg CF because of uncertainty over whether their token is a security and fear of future enforcement.
Speech effect: Bright-line rules for classifying crypto assets (security vs. commodity vs. collectible) could let Web3 and DeFi projects confidently raise capital under Reg CF without complex offshore structures.
Impact:
- Surge in crypto-native Reg CF campaigns.
- Potential for hybrid offerings (token + equity).
- More investor protections built in through token standards like ERC-3643.
3. Custody Rule Changes Could Enable Crypto Asset Holding in Reg CF
Current situation: Custody of digital securities for Reg CF investors is cumbersome—few broker-dealers or funding portals can handle them directly.
Speech effect: If custody rules are modernized to allow self-custody or broader custodian choice, Reg CF investors could hold their securities in personal wallets or use a wide range of regulated custodians.
Impact:
- Lower custodial friction.
- Reduced reliance on illiquid, portal-controlled transfer agents.
- Investor empowerment and portability.
4. Secondary Market Liquidity Could Dramatically Improve
Current situation: Reg CF securities can be sold after 12 months (with exceptions), but active markets are minimal due to low adoption of ATSs and high compliance burdens.
Speech effect:
“Super-app” licensing could allow a single platform to handle both primary Reg CF offerings and secondary trading (tokenized and traditional).
On-chain trading systems could operate without traditional intermediaries.
Impact:
- More vibrant secondary markets for Reg CF securities.
- Potential for real-time settlement and 24/7 trading.
5. Innovation Exemption Could Lower Barriers for New Reg CF Models
Current situation: New funding portal business models must fit into rigid, pre-defined rules or go through lengthy exemptive relief processes.
Speech effect: An “innovation exemption” could allow experimental Reg CF structures—like DAO-managed investment clubs or community-governed funding pools—to launch quickly with lighter, principles-based oversight.
Impact:
- Faster rollout of creative crowdfunding models.
- More niche, community-driven funding portals.
- Potential for cross-border investment flows into U.S. Reg CF deals.
6. Competition With Offshore Platforms Could Shift
Current situation: Offshore token-based capital raises often bypass U.S. retail investors.
Speech effect: By giving crypto and token issuers a clear, efficient domestic path—including under Reg CF—those offerings could shift onshore.
Impact:
- U.S. Reg CF platforms could win back issuers who previously went abroad.
- Stronger global competitiveness of U.S.-based portals.
Bottom Line
If implemented, “Project Crypto” could transform Reg CF from a mostly equity/debt crowdfunding market into a fast, on-chain, liquid ecosystem—blurring lines between private and public markets.
The biggest winners would be:
- Issuers seeking low-cost, retail-friendly capital with built-in liquidity.
- Funding portals that adapt quickly to on-chain custody, tokenization, and integrated trading.
- Retail investors who gain faster exit opportunities and broader asset choice.
The key dependencies will be:
- How quickly the SEC finalizes “purpose-fit” Reg CF tokenization rules.
- Whether secondary trading exemptions are expanded.
- How the “innovation exemption” is scoped for funding portals.