3 Minutes
SEC Chair Signals Narrow View on Crypto Securities
U.S. Securities and Exchange Commission Chair Paul Atkins told attendees at the 2025 Wyoming Blockchain Symposium that only a small fraction of cryptocurrencies should be treated as securities. His comments mark a notable shift in regulatory tone and have immediate implications for token classification, enforcement, and industry compliance.
Packaging and Distribution, Not Technology, Drive the Test
Atkins emphasized that the determining factor for whether a token is a security is how it is packaged and marketed, rather than its technical design. In other words, a token's legal status depends largely on the economic arrangements and sales practices around it — how it is presented to investors, whether purchasers expect profits from the efforts of others, and the way distribution is structured.
Departure from Previous Enforcement Approaches
This stance departs from the more expansive enforcement posture of former SEC Chair Gary Gensler, who treated many crypto assets as falling under U.S. securities laws and pursued broad enforcement actions. Atkins' comments signal a more targeted approach that could reduce uncertainty for exchanges, token issuers, and crypto service providers that have faced aggressive regulatory scrutiny in prior years.
Project Crypto: A Framework for Clearer Rules
Atkins also outlined the SEC's new initiative, Project Crypto, designed to create clearer guardrails for crypto distributions, custody, and trading. The program aims to produce interpretive guidance and consider exemptive or alternative authority where existing rules are not well suited to digital assets. The goal is practical regulatory clarity that supports market integrity while enabling responsible innovation.
Practical Focus: Custody, Trading, and Stablecoins
Project Crypto will concentrate on real-world operational areas such as custody best practices, compliance for trading venues, and transparent rules for token offerings. This effort comes amid broader U.S. policy moves to strengthen America’s leadership in digital asset markets, including congressional advances like the GENIUS Act for stablecoins and other legislative proposals targeting a unified federal framework.
What This Means for the Crypto Industry
Market participants can expect a more collaborative and less adversarial relationship with the SEC under Atkins. While final rules are still under development, the agency has indicated it will use multiple tools to prevent outdated regulations from hindering innovation. Atkins has stressed the need for protections against regulatory overreach and inconsistent enforcement, urging a framework that "future proofs" crypto markets while safeguarding investors.
Next Steps for Firms and Investors
Crypto firms should monitor Project Crypto and prioritize transparent token economics, distribution practices, and custody arrangements. Investors and stakeholders will benefit from clearer guidance that distinguishes between utility tokens, payment tokens, and securities, helping to reduce legal uncertainty and support responsible market growth.
Comments