SEC Chair Paul Atkins on Wendesday said the agency will, in coordination with the Commodity Futures Trading Commission (CFTC), introduce an interpretive framework defining which crypto assets are not securities.
A Game-Changer For Crypto Regulation Landscape
The framework classifies digital commodities, digital tools, digital collectibles, including NFTs and meme coins, and stablecoins as generally outside the SEC’s securities jurisdiction, Atkins said in an interview with CNBC.
The move marks a shift from the agency’s prior enforcement-driven approach and aims to reduce uncertainty by offering clearer definitions and practical guidance.
Atkins said the framework also reflects a more collaborative stance, allowing companies to seek clarity without immediate enforcement risk.
While the guidance is not legally binding and could face court challenges, the SEC plans to pursue formal rulemaking to solidify these distinctions and potentially introduce exemptions.
Understanding The Howey Test’s New Implications
Atkins said the framework relies on the long-standing legal standard from SEC v. W.J. Howey Co., which determines whether an asset qualifies as a security.
The key factor, he said, is whether developers make promises of profits or ongoing managerial efforts that create investor expectations.
Assets that function primarily as collectibles or tools, without such promises, are less likely to be treated as securities. However, hybrid structures that include profit-sharing elements could still fall under SEC oversight.
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