In a speech, U.S. Securities and Exchange Commission Chairman Paul S. Atkins set out his “Project Crypto” approach to applying federal securities laws to crypto assets, signalling a shift toward clearer categorisation of tokens and a more tailored framework for offerings and secondary trading. He argued that while some token-related transactions can be investment contracts under the Howey test, investment contracts can end and a token should not be treated as a security indefinitely solely because of its origin. Atkins previewed a potential token taxonomy anchored in Howey analysis and described four non-exhaustive categories: “digital commodities” or “network tokens” linked to a functional and decentralised system, “digital collectibles”, and “digital tools”, each of which he views as generally not securities, and “tokenized securities”, which remain securities. He also called for Howey to be applied with focus on explicit and unambiguous issuer representations or promises of essential managerial efforts and said once those promises are fulfilled, fail, or otherwise terminate, subsequent token trades should not automatically be treated as securities transactions. He directed staff to prepare recommendations for Commission consideration that would allow tokens tied to an investment contract to trade on non-SEC regulated platforms, including intermediaries registered with the Commodity Futures Trading Commission or under a state regulatory regime, and to consider a package of exemptions to create a tailored offering regime for crypto assets subject to an investment contract, while noting that SEC anti-fraud provisions and, where applicable, the CFTC’s anti-fraud and anti-manipulation authority would continue to apply. He indicated the Commission could consider these steps in the coming months, alongside further engagement through roundtables and public input, and reiterated support for congressional efforts to codify a comprehensive crypto market structure framework, referencing an objective of enacting legislation by the end of 2025.
U.S. Securities & Exchange Commission 2025-11-12
U.S. Securities and Exchange Commission chairman outlines Project Crypto plans for Howey based token taxonomy and tailored crypto exemptions
SEC Chairman Paul S. Atkins outlined "Project Crypto," proposing a clearer framework for applying federal securities laws to crypto assets. Atkins suggested a token taxonomy based on the Howey test, categorizing tokens into "digital commodities," "digital collectibles," "digital tools," and "tokenized securities." He emphasized tailored regulations and exemptions for crypto assets, maintaining anti-fraud provisions, and supported legislative efforts for a comprehensive crypto market structure by 2025.