SEC Chair Paul Atkins has presented a plan for a new classification system for cryptoassets aimed at ending regulatory uncertainty and recognizing the limits of the agency’s jurisdiction as part of the Project Crypto initiative.
He said the era of one template for all must end, since most tokens circulating in the crypto market are not securities on their own. The SEC is now developing a token-classification structure based on the Howey Test.
Atkins emphasized that the SEC’s goal is to give the market clear boundaries rather than push innovation out of the United States. He also voiced support for efforts by Congress and the White House to adopt a dedicated law governing the structure of the crypto market.
How SEC Classifies Digital Assets
Paul Atkins outlined a preliminary list of four categories of cryptoassets intended to clarify how federal securities laws apply. According to this list, the following are not considered securities:
- Digital goods or network tokens: their value derives from the functioning of a decentralized cryptosystem rather than from an expectation of profit tied to the managerial efforts of third parties.
- Digital collectibles (NFTs): assets held for collecting or practical use, including art, music and games. Buyers do not expect profit driven by ongoing managerial activity.
- Digital tools: assets with functional utility such as membership, tickets or proofs of ownership. Their purchasers likewise do not expect income generated by someone else’s managerial efforts.
The fourth category, tokenized securities, remains under SEC jurisdiction because it represents ownership rights to financial instruments that fall under the definition of a security.
Atkins noted that the list is not exhaustive and will be refined as Project Crypto progresses and consultations with the market continue.
He expressed full support for Congress’s work on comprehensive crypto legislation, saying his proposals are intended to complement it. He added that he hopes the bipartisan bill will be passed and signed by President Trump before year-end, calling clear statutory rules the best safeguard against regulatory overreach.
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