Advertise
- Debashree Patra
Debashree Patra
- Reviewed by:
Qadir AKQadir Ak is the founder of Coinpedia. He has over a decade of experience writing about technology and has been covering the blockchain and cryptocurrency space since 2010. He has also interviewed a few prominent experts within the cryptocurrency space.
- Nov 13, 2025 07:18 UTC
-
SEC Chairman Paul Atkins Launches Project Crypto, Launches New Token Framework
SEC Chairman Paul S. Atkins unveils Project Crypto, a new token taxonomy framework bringing long-awaited clarity to U.S. digital asset regulation.
At the Philly Fed Fintech Conference, SEC’s Paul Atkins says most crypto tokens aren’t securities, outlining a new framework for digital assets.
At the Philadelphia Fed Fintech Conference, SEC Chairman Paul S. Atkins revealed the next phase of Project Crypto, a major step toward establishing a token taxonomy framework. This initiative aims to clearly categorize digital assets under U.S. securities laws, providing long-awaited regulatory clarity to the crypto market.
Fox Journalist Eleanor Terrett shared detailed insights from Atkins’s speech on X, highlighting the SEC’s intention to balance innovation and investor protection while fostering a transparent crypto environment.
Most Crypto Tokens Are Not Securities, Says SEC Chairman
Atkins began by stating that most crypto tokens currently traded are not securities. He clarified that simply existing on a blockchain doesn’t automatically make a token a security under U.S. law. The SEC continues to rely on the Howey Test to determine what qualifies as an “investment contract,” but Atkins emphasized that the agency is now applying it more flexibly to suit the realities of digital assets.
He explained that tokenization doesn’t change the nature of an asset — a stock remains a stock, and a bond remains a bond, even when converted into a digital token. Likewise, calling something a “token” or “NFT” doesn’t exempt it from regulation if it operates like an investment reliant on someone else’s efforts for profit.
New SEC Token Taxonomy Framework Explained
The new token taxonomy framework is built around two key principles:
- Tokenized traditional assets retain their original legal status.
For example, a tokenized bond is still a bond under securities law. - Labeling an asset as a token or NFT doesn’t exclude it from SEC oversight.
If investors buy it with expectations of profit from another party’s work, it may still qualify as a security.
This approach represents a modernized interpretation of the Howey Test, ensuring the rules evolve with the digital asset ecosystem. Atkins reiterated that the SEC’s goal is to adapt securities laws to fit crypto realities, not force digital assets into outdated legal categories.
How the SEC Framework Impacts Crypto Trading?
Atkins also addressed the evolution of crypto tokens over time. Some assets may initially qualify as securities, especially during token sales that promise future profits, but can later transition into non-securities as their underlying blockchain networks become decentralized and independent.
He drew a parallel to an old farming case, noting that once the original business arrangement ended, the land itself was no longer considered a security. Similarly, once a crypto project achieves full decentralization, its tokens could lose their security status.
SEC’s Approach: Encouraging Crypto Innovation While Protecting Investors
Atkins revealed that the SEC is exploring ways for non-security tokens to trade on platforms regulated by the CFTC or state-level financial agencies, not just SEC-approved exchanges. This shift could open new doors for innovation and market growth while maintaining investor safety.
He emphasized that the SEC intends to complement congressional efforts, not replace them. Concluding his address, Atkins said:
“We will not let fear of the future trap us in the past.”
This signals a pivotal moment for the crypto industry, as regulators move toward a more balanced, transparent, and innovation-friendly framework for digital assets in the United States.
Never Miss a Beat in the Crypto World!
Stay ahead with breaking news, expert analysis, and real-time updates on the latest trends in Bitcoin, altcoins, DeFi, NFTs, and more.
FAQs
It’s a system to classify digital assets clearly under U.S. law, ensuring crypto tokens are properly regulated and understood.
No. The SEC says most tokens aren’t securities unless they rely on others’ efforts for profit, based on a flexible Howey Test approach.
Yes. Tokens sold as securities can become non-securities once their networks grow decentralized and no longer depend on one central entity.
The SEC aims to protect investors while allowing non-security tokens to trade on CFTC or state-regulated platforms for greater flexibility.
Trust with CoinPedia:
CoinPedia has been delivering accurate and timely cryptocurrency and blockchain updates since 2017. All content is created by our expert panel of analysts and journalists, following strict Editorial Guidelines based on E-E-A-T (Experience, Expertise, Authoritativeness, Trustworthiness). Every article is fact-checked against reputable sources to ensure accuracy, transparency, and reliability. Our review policy guarantees unbiased evaluations when recommending exchanges, platforms, or tools. We strive to provide timely updates about everything crypto & blockchain, right from startups to industry majors.
Investment Disclaimer:
All opinions and insights shared represent the author's own views on current market conditions. Please do your own research before making investment decisions. Neither the writer nor the publication assumes responsibility for your financial choices.
Sponsored and Advertisements:
Sponsored content and affiliate links may appear on our site. Advertisements are marked clearly, and our editorial content remains entirely independent from our ad partners.
Yes 
No 
