The U.S. Securities and Exchange Commission is not waiting for Congress to catch up. SEC Chair Paul Atkins has confirmed that, despite the failure of the CLARITY Act in Congress, his agency is moving ahead with new rules that will define how projects can legally raise money directly on the blockchain β a process known as onchain fundraising.
In a wide-ranging interview with CNBC’s Squawk Box on September 29, Atkins made it clear that regulatory clarity for digital assets is coming, with or without legislation.
What Atkins Actually Said
Speaking to CNBC, Atkins acknowledged that the CLARITY Act β a bill designed to clearly define which digital assets qualify as securities and which fall outside SEC jurisdiction β failed to pass in Congress. Yet, instead of treating that as a setback, the SEC Chair framed it as motivation.
βEven though the CLARITY Act failed in Congress, we are proceeding to provide clarity,β Atkins said, signaling that the SEC intends to use its existing authority to bring structure to the murky world of token offerings, self-custody, and decentralized fundraising.
He also discussed a number of other crypto-relevant topics, including the future of initial public offerings (IPOs) and how blockchain technology could reshape traditional capital markets.
Why the CLARITY Act Failed
The CLARITY Act was one of the most anticipated pieces of crypto legislation in the United States. Its goal was simple but ambitious: draw a bright line between cryptocurrencies that should be regulated as securities and those that should not.
However, the bill faced significant political headwinds. Lawmakers disagreed on key provisions, particularly around the role of the SEC versus the Commodity Futures Trading Commission (CFTC), the treatment of decentralized finance (DeFi), and how to handle staking rewards. With Congress deadlocked, the bill never made it across the finish line.
For years, the crypto industry has complained about the lack of clear rules. Projects that wanted to launch tokens legally often had to guess whether their asset would be classified as a security β a determination that carries enormous legal and financial consequences.
What “Onchain Fundraising” Actually Means
If you’re new to crypto, onchain fundraising simply refers to raising capital directly on a blockchain. Instead of selling shares through a traditional bank or venture capital firm, a project can issue tokens to investors using smart contracts β pieces of code that automatically execute transactions when certain conditions are met.
This can happen in several ways:
- Initial Coin Offerings (ICOs): Early versions of token sales where investors buy new tokens in exchange for crypto or fiat currency.
- Initial DEX Offerings (IDOs): Token sales conducted directly on decentralized exchanges (DEXes).
- Tokenized securities: Traditional assets like stocks or bonds represented as blockchain tokens.
The appeal is obvious: onchain fundraising can be faster, cheaper, and more accessible to a global pool of investors. But the legal uncertainty has been a major barrier to adoption β particularly for U.S.-based projects.
What the SEC’s New Rules Could Look Like
Atkins hasn’t released a detailed framework yet, but his comments suggest the SEC is likely to focus on a few key areas:
1. Disclosure Standards
Just like traditional IPOs require companies to publish detailed financial documents, onchain fundraising may soon require similar disclosures. This could include information about the project team, tokenomics (how many tokens exist and how they are distributed), and the risks involved.
2. Investor Protections
The SEC is expected to introduce safeguards so that everyday investors aren’t exposed to fraudulent schemes. This might include accreditation requirements (rules that limit certain investments to wealthier, more experienced investors) or limits on how much non-accredited investors can contribute.
3. Clear Definitions
Perhaps most importantly, the SEC appears ready to define which tokens are securities and which are not. This could bring long-awaited clarity to developers, exchanges, and investors who have been operating in a legal gray zone.
What This Means for Crypto Investors
For anyone holding or considering buying crypto, this is potentially big news. Clear SEC rules could:
- Attract more institutional money: Big institutions have largely avoided the space due to legal uncertainty. Clear rules could change that.
- Boost legitimate projects: Today, many serious builders leave the U.S. because of unclear regulations. Atkins’ push could bring them back.
- Reduce scams: While no regulation can eliminate fraud, clearer standards make it easier to identify and prosecute bad actors.
That said, regulation isn’t free. Some in the crypto community worry that overly strict rules could push innovation offshore or stifle the experimental nature of decentralized finance. The balance Atkins strikes will be critical.
What to Watch Next
The SEC has not yet announced a formal timeline for its onchain fundraising framework, but here are a few things worth tracking:
- Official SEC proposals: Watch the SEC’s website for new rule proposals and public comment periods.
- Industry response: Major crypto advocacy groups and law firms will likely weigh in.
- Market reaction: Token prices often move on regulatory news, especially when it comes from the SEC.
If you’re actively trading or investing in crypto, it helps to keep your assets secure. Many experienced investors use a hardware wallet like Ledger to store their tokens offline, away from exchange risks. And if you’re looking for a reliable place to buy and sell crypto, established platforms like Kraken or Bitvavo remain popular choices.
Conclusion
The failure of the CLARITY Act was a blow to the crypto industry, but SEC Chair Paul Atkins is signaling that legislative gridlock won’t stop reform. By using its existing powers to clarify how projects can raise money onchain, the SEC is taking matters into its own hands.
For crypto builders and investors alike, the coming months will be crucial. Clear, well-designed rules could unlock a new wave of innovation and institutional adoption. Poorly designed rules could do the opposite. Either way, change is coming β and it’s happening faster than many expected.
Stay informed, stay skeptical, and keep learning. The crypto industry moves quickly, and regulatory developments like these are exactly why it pays to stay up to date.
