SEC Chair Atkins Says Most Tokens Are Not Securities

SEC Chair Paul Atkins says only few tokens qualify as securities, contrasting Gensler and aligning with Congress on crypto laws.

U.S. Securities and Exchange Commission (SEC) Chair Paul Atkins has taken a friendlier stance toward cryptocurrency than his predecessors. 

According to details of a speech he gave at the Wyoming Blockchain Symposium, Atkins said that very few crypto tokens should be considered securities.

He explained that tokens themselves are “probably not” securities. Instead, classification depends on how a token is packaged and sold. 

How Atkins Views Token Classification

Atkins told the audience in Jackson Hole that the SEC will not assume every token is a security by default. Instead, the agency will examine the full context of each offering.

“There are very few, in my mind, tokens that are securities,” he said. “It depends on what the package is around it and how that’s being sold.”

This is a major switch from the view of former SEC Chair Gary Gensler. For context, Gensler often said the “vast majority” of tokens were securities under the Howey test. Atkins is now pushing the SEC in a different direction:

One that leans more toward fostering innovation rather than restricting it.

Project Crypto and Market Modernisation

Last month, the SEC launched Project Crypto. Project Crypto is an initiative designed to update securities laws to be more welcoming for investors and issuers. 

Atkins described it as an effort to help U.S. financial markets move on-chain.

“It is a new day, especially for this industry,” Atkins said. “We are about innovation. Now we want to embrace innovation.”

Project Crypto has already drawn attention from analysts and industry leaders. According to Bernstein analysts, it is one of the most transformative crypto visions ever proposed by a sitting SEC chair. 

Bitwise CIO Matt Hougan described the project as a roadmap for the next five years of investing, and also suggested that stocks, bonds and even dollars could eventually move on-chain.

Congress Prepares to Step In

While Atkins is setting the tone at the SEC, lawmakers are also moving to clarify crypto regulation. The U.S. House of Representatives passed the Digital Asset Market Clarity (CLARITY) Act in July. 

Leaders in the Senate Banking Committee have said they plan to build on the bill when the Senate returns from recess on September 3.

Senate Banking Committee Chair Tim Scott indicated that as many as 18 Democrats may join Republicans to support new market structure legislation. That level of backing could push a law through by the end of the year.

Atkins has welcomed the effort, but he also made clear that the SEC plans to keep moving forward with its initiatives. “We must craft a framework that future-proofs the crypto markets against regulatory mischief,” he said in a post on X after the symposium.

Contrast With the Previous Administration

The change under Atkins means that the SEC is indeed moving away from the SEC’s approach to regulating digital assets during the Biden administration.

Gary Gensler, who chaired the agency until January, argued that most tokens were securities and should fall under SEC oversight. His approach was one of the major sources of friction between the agency and the crypto industry, which accused the SEC of “regulating by enforcement” instead of offering clear rules.

Overall, the Atkin’s stance could open the door to many new developments within the crypto space, including ETF approvals and new product baskets that could completely change the way investors approach digital assets.