The Securities and Exchange Commission’s stance on cryptocurrency policy is undergoing rapid changes, but recent statements from Chairman Paul Atkins have left the crypto community with unanswered questions, especially around wallet rules.

Atkins delivered a policy speech this summer addressing the evolution of financial technology and emphasizing the need to modernize securities laws for digital assets. He announced “Project Crypto,” an initiative aimed at fostering growth and innovation in the American crypto market. The goal: bring traditional finance on-chain and update outdated rules to encourage responsible investment and more efficient market practices.

However, one area Atkins did not clarify is how the SEC plans to regulate crypto wallets. Wallets—software or hardware for storing digital assets—play a central role in user autonomy and privacy. The lack of clear guidelines on which wallet arrangements may trigger SEC compliance obligations continues to cloud the landscape for wallet providers and users alike. Industry participants remain concerned about potential new recordkeeping, reporting, and customer identification requirements, particularly for transactions involving unhosted wallets or those hosted in foreign jurisdictions.

While the SEC’s broader agenda is to streamline regulations for crypto trading, custody, and broker-dealers, the specifics around wallet compliance are still being hashed out. This ambiguity poses challenges for developers, custodians, and investors looking for regulatory certainty. Meanwhile, other agencies such as FinCEN have proposed significant new obligations around wallet activity and identity verification, signaling that wallet regulation remains a hot topic.

As the regulatory framework continues to evolve, stakeholders in the crypto space should closely monitor SEC statements and regulatory filings for further clarity. Until then, the rules governing crypto wallet usage and compliance remain vague, underscoring the ongoing tension between innovation and regulation in digital finance.