Written by: San, Deep Tide TechFlow
On December 2, SEC Chairman Paul Atkins declared in a speech at the New York Stock Exchange that the innovative exemption rules for cryptocurrency companies will officially take effect starting January 2026.
The new innovative exemption rules for cryptocurrency companies can be traced back to the Project Crypto initiative in July of this year. However, it was forced to be put on hold due to a government shutdown. Now, as it is being mentioned again and confirmed for implementation, it has sparked significant attention and discussion in the market.
However, can this highly anticipated policy truly bring a spring to the crypto industry?
Core Content of the Innovative Exemption Rules
According to the details released by the SEC, the innovative exemption mainly includes the following three key factors.
First is the scope of exemption. Any entity developing or operating a business related to crypto assets can apply, including trading platforms, DeFi protocols, stablecoin issuers, and even DAO organizations.
The innovative exemption period is 12-24 months, during which projects only need to submit simplified information disclosures, rather than complete S-1 registration documents.
Secondly, compliance requirements. Although enjoying the exemption, projects must still meet basic compliance standards, such as implementing KYC/AML procedures, submitting quarterly operational reports, and accepting regular SEC reviews.
For projects involving retail investors, investor protection mechanisms must be established, including risk warnings and investment limits.
Finally, token classification standards. In this innovative exemption, the SEC divides digital assets into four categories: commodity-type (such as BTC), utility-type (utility tokens), collectible-type (NFTs), and tokenized securities-type.
The first three categories, upon meeting the conditions of "sufficient decentralization" or "functional completeness," can be removed from the securities regulatory framework.
Voices of Doubt
The policy requires all projects participating in the exemption to implement "reasonable user verification procedures," a requirement that directly conflicts with the decentralization philosophy of the crypto industry and has sparked considerable controversy within the DeFi community.
According to the new rules, DeFi protocols need to divide liquidity pools into two categories: permissioned pools for compliant investors and public pools for all users.
Permissioned pools enjoy more relaxed regulation but must verify the identity of every participant. Such a requirement undoubtedly "traditionalizes" crypto finance.
Even more concerning may be the technical transformation requirements.
The SEC recommends that DeFi projects adopt compliant token standards such as ERC-3643, which embed identity verification and transfer restriction functions in smart contracts.
If every transaction needs to check a whitelist and tokens can be frozen by centralized entities, is DeFi still the DeFi we know?
This requirement also contradicts the previous stance of Uniswap founder Hayden Adams, who opposed mandatory real-name verification.
Even if compliance requirements are accepted, the policy still faces significant uncertainty at the implementation level.
For the policy of relaxed regulation for sufficiently decentralized projects, the SEC has not provided clear quantitative standards. No one knows whether this standard is based on the number of nodes, token distribution, or other factors.
This uncertainty gives regulators enormous discretionary power and brings uncertainty to project teams as well.
Another issue is the arrangements after the exemption period ends.
At the latest, after 24 months, these exempted projects must either complete registration or prove that they have achieved "sufficient decentralization." But if the SEC determines at that time that the project still does not meet the standards, will all previous operations be retroactively investigated?
Meanwhile, the World Federation of Exchanges (WFE) raised another angle of doubt: Why should crypto assets enjoy special treatment? If every emerging industry demands regulatory exemptions, the fairness and consistency of the entire regulatory system will be challenged.
Image: WFE letter to SEC: "Re: SEC Crypto Task Force"
Potential Positive Impacts
Despite the many controversies, the innovative exemption policy has indeed brought some positive changes to the crypto industry, and the community generally believes this is a major positive development for the industry.
Image: Blogger @qinbafrank's tweet
In terms of policy, the most direct impact is the reduction of compliance costs.
In the past, for a crypto project to operate compliantly in the US, it needed to spend millions of dollars in legal fees and take more than a year. Now, through the exemption mechanism, projects can start operations first and gradually improve their compliance systems in practice. This is a major benefit for startup teams with limited funds.
In addition, there is also greater room for technological innovation.
A series of new crypto concepts have the opportunity to be tested under the new exemption framework, especially in the hot stablecoin sector this year. With supporting legislative support, it is expected to establish higher regulatory standards, which is of great significance to the entire payment system.
Compliance Survival Space for US-based Projects
In recent years, many crypto projects originally rooted in the US have chosen to "leave." Ripple moved part of its business to Singapore, Coinbase once considered overseas listing, and more early teams simply registered in the Cayman Islands or BVI from Day 1, deliberately avoiding the US market.
The core reason for this exodus is not that regulation is too strict, but that it is too ambiguous. The SEC's enforcement-as-regulation model leaves project teams at a loss; what is compliant today may receive a Wells Notice tomorrow. Rather than gambling, it's better to leave directly.
The innovative exemption policy at least changes this in form: projects can first obtain a 12-24 month "safe period" and operate within a clear framework, rather than being anxious in a gray area.
For teams that originally wanted to do compliant business and serve US users, this indeed lowers the threshold.
But it should be noted: this is not the same as a "talent return to the crypto industry."
The global talent drain in the crypto market is more due to the industry's own trust crisis. On the contrary, if chaos prevails during the exemption period, it may accelerate further talent outflow.
So, more accurately: this policy opens a window for "projects that want to operate compliantly in the US," but it neither can nor intends to solve the fundamental problems of the crypto industry.
Conclusion
This innovative exemption policy by the SEC represents a major shift in the US approach to crypto regulation. It attempts to find a middle ground between "total prohibition" and "laissez-faire." Perhaps this path is not perfect and is full of compromises and contradictions, but at least it provides the industry with the possibility to move forward.
Whether the policy can succeed depends on multiple factors, such as the SEC's enforcement standards, the self-discipline of project teams, and technological development. If all parties can find a balance, 2026 may become a new starting point for the development of the crypto industry.
And now, the door to exploration has just opened.
