SEC chair Paul Atkins outlines plans for crypto token classification

U.S. Securities and Exchange Commission chair Paul Atkins says the regulator is considering a new framework for classifying digital assets.

While speaking at the Federal Reserve Bank of Philadelphia, Atkins recalled “Project Crypto,” an initiative the agency rolled out earlier in the year as part of the new regulatory shift under President Donald Trump.

According to Atkins, the goal is to differentiate between the types of cryptocurrencies, outlining which fall under securities law and which don’t. The SEC is looking to take this approach amid broader support for legislative efforts underway in Congress.

While the agency continues to ensure market participants adhere to investor protection principles and laws, Atkins says most cryptocurrencies do not, in themselves, qualify as securities.

So, what does Atkins think?

The SEC chair outlined four categories: digital commodities or network tokens, digital collectibles, digital tools and tokenized securities.

It is the classification that Atkins says will help form a “coherent token taxonomy.”

According to this classification, digital commodities, or network tokens, are not securities. The same applies to digital collectibles and digital tools, as buyers of these assets do not expect “profits from the essential managerial efforts of others.”

However, tokenized securities are securities as they represent ownership of a financial instrument.

But Atkins says not every token that satisfies the investment contract classification at the time of its sale will remain a security forever.