SEC Chair Paul Atkins Says Most Crypto Tokens Are Not Securities

TLDR

• SEC’s “Project Crypto” shifts focus: most tokens no longer deemed securities.

• Paul Atkins pivots SEC policy, easing rules for crypto offerings and ICOs.

• New SEC stance favors innovation, ending regulation-by-enforcement era.

• Congress advances CLARITY Act to align with SEC’s crypto-friendly shift

• Crypto firms cheer SEC’s pivot as U.S. bids to regain blockchain leadership.

A shift in the U.S. Securities and Exchange Commission’s (SEC) position on crypto tokens marks a key regulatory moment. SEC Chair Paul Atkins declared that most crypto tokens are not securities, refocusing regulatory attention. The announcement came during his address at the Wyoming Blockchain Symposium in Jackson Hole, where he detailed the SEC’s new “Project Crypto” initiative.

Project Crypto Signals Regulatory Shift

The SEC’s new policy aims to reduce enforcement actions and increase regulatory clarity for crypto businesses. Through Project Crypto, the SEC will offer tailored disclosures, exemptions, and safe harbors for digital assets. This includes offerings like ICOs, airdrops, and network rewards, which previously faced enforcement threats.

Paul Atkins explained the agency would no longer automatically treat tokens as securities. Instead, it will examine the full context of token offerings. This method departs from previous interpretations that classified the majority of crypto assets under the Howey test.

Departure From Gensler’s Approach

The SEC’s position under former Chair Gary Gensler often placed digital assets under strict securities law. Gensler maintained that most crypto tokens met the definition of a security under the Howey test. That approach led to numerous enforcement actions targeting decentralized finance and token sales.

With Atkins now leading the SEC, the narrative has clearly changed. He emphasized that only a small portion of tokens qualify as securities. This pivot reduces uncertainty for crypto firms, who have long requested clear, supportive regulations.

Atkins stated that how a token is sold and the surrounding arrangement matter more than the token itself. The new policy framework also aims to make the U.S. more attractive for blockchain innovation. Consequently, several crypto groups have begun proposing adjustments to potential SEC exemptions.

Legislative Efforts Build Parallel Momentum

Congress is crafting bills to complement the SEC’s direction and formally establish crypto market structures. The House passed the Digital Asset Market Clarity (CLARITY) Act in July, signaling bipartisan support. Meanwhile, the Senate will resume work on related legislation when it returns from recess on September 2.

Senate Banking Committee Chair Tim Scott suggested the vote could be close. He estimated up to 18 Democrats might support the bill, but emphasized the need for strategic negotiation. The Senate aims to build on the momentum of the recently passed GENIUS Act, which focused on stablecoins.

The evolving stance at the SEC aligns with this broader legislative effort. Together, they could form a more unified framework for digital assets. This coordination between the executive and legislative arms is critical for a functioning crypto policy.

Crypto Industry Responds to Regulatory Change

Crypto firms are already reacting to the SEC’s evolving position. Andreessen Horowitz and the DeFi Education Fund requested the SEC provide enforcement relief for decentralized app developers. They argue that even semi-centralized apps deserve protection under the new guidance.

Atkins reassured stakeholders that regulation by enforcement is over. He reiterated the agency’s intention to support, not punish, innovation in blockchain. The regulatory shift reflects a deliberate strategy to attract crypto innovation back to the United States.

This change in SEC policy marks a significant moment for the crypto market. Clear guidance and fewer enforcement actions will likely encourage broader participation. As Paul Atkins explained, the focus is now on regulatory certainty—not restriction.

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