SEC Chair Says NFTs Typically Fall Outside Securities Laws

TLDR

• SEC Chair Paul Atkins said NFTs generally do not meet the definition of securities under federal law.
• The SEC identified digital commodities, digital tools, digital collectibles, and stablecoins as assets that usually fall outside securities laws.
• Atkins stated that regulators assess each digital asset based on facts and circumstances and existing legal precedent.
• He explained that digital collectibles function like physical collectibles rather than investment contracts.
• Atkins said the SEC is moving away from regulation through enforcement toward clearer guidance.

The US Securities and Exchange Commission clarified how it classifies certain digital assets under federal law. SEC Chair Paul Atkins said NFTs generally do not meet the definition of securities. He outlined the agency’s updated stance during a CNBC interview and reinforced a shift in regulatory policy.

Atkins confirmed that the SEC identified four categories of digital assets that usually fall outside securities laws. He listed digital commodities, digital tools, digital collectibles, and stablecoins during the interview. He stressed that the agency evaluates each asset based on established legal standards and specific facts.

NFTs and Digital Collectibles Under SEC Review

Atkins addressed questions about digital collectibles such as NFTs and how regulators assess them. CNBC host Andrew Ross Sorkin asked whether some digital collectibles could resemble securities depending on structure. Atkins responded that classification depends on the facts and circumstances surrounding each asset.

He said the SEC focuses on whether an asset involves an investment contract under longstanding precedent. He explained that digital collectibles usually function like physical collectibles rather than investment contracts. “Some of these collectibles, like a baseball card, a meme or one of those memecoins, NFTs  those are something that somebody buys,” Atkins said.

He described such purchases as fixed transactions that do not rely on ongoing managerial efforts. “It’s an immutable purchase,” Atkins said during the interview. He added that these items do not operate like assets that people trade as part of investment schemes.

Sorkin noted that certain structures could change the analysis of digital collectibles. Atkins agreed that structure matters, and he repeated that regulators examine each case individually. He emphasized that the SEC applies existing legal tests rather than creating new definitions for digital assets.

The SEC’s interpretive release outlined digital commodities as another category outside securities laws. Atkins included digital tools and stablecoins in the same framework. He maintained that the agency uses established investment contract standards in every evaluation.

SEC Shifts From Enforcement-Led Crypto Policy

Atkins also described changes in the SEC’s broader approach to digital asset oversight. He said the agency now seeks clearer guidance instead of relying on enforcement actions. “We’re breaking with the past,” Atkins said during the CNBC interview.

He stated that the SEC aims to create a predictable regulatory framework for the digital asset sector. He linked this effort to the agency’s updated interpretive release on digital assets. He confirmed that the shift aligns with a more crypto-friendly policy environment in early 2025.

Last year, Atkins criticized the SEC’s prior reliance on what he called “regulation through enforcement.” He pledged to reduce that approach and to clarify how federal securities laws apply. He repeated that message during the CNBC appearance.

Atkins also referenced tokenization as an area that regulators should support. He said regulators should encourage innovation rather than restrict it. He argued that earlier regulatory missteps left the United States trailing global crypto development by nearly 10 years.

He vowed to reverse that trend through clearer rules and direct communication. He reiterated that the SEC will continue to evaluate digital assets under established legal precedent. The agency’s interpretive release remains the latest formal guidance on how it views NFTs and other digital assets.

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