SEC Chair Paul Atkins Reveals Which Crypto Tokens He Thinks Are Securities

In brief

SEC Chair Paul Atkins said most crypto tokens, including network tokens and meme coins, shouldn’t be treated as securities.
Only tokens tied to explicit and unambiguous managerial promises should qualify as securities, he clarified.
He also announced plans to let securities and non-securities trade together on “super app” platforms not regulated by the SEC.

SEC chair Paul Atkins made perhaps his most explicit comments yet on the security status of crypto tokens Wednesday, in a lengthy speech that clarified the few circumstances in which the Wall Street regulator plans to oversee the booming crypto industry under the second Trump administration.

Consistent with prior statements made by Atkins and his fellow Republican commissioner Hester Peirce, the SEC chair emphasized today that certain categories of crypto tokens should not be considered securities in and of themselves. Those include “network tokens” linked to a functional, decentralized blockchain network—a category that likely covers most popular crypto tokens, ranging from Ethereum to Solana to XRP.

Another exempt token category listed by Atkins is one he dubbed “digital collectibles”—cryptocurrencies that either represent rights to media, or, crucially, reference “internet memes, characters, current events, or trends.” By that definition, wildly popular and volatile meme coins appear to also be carved out from the SEC’s purview.

Third, Atkins said that “digital tools”—crypto assets providing a practical function like a ticket, membership, or badge—are also not securities in his opinion.

While those categorizations may not necessarily come as a surprise, given the SEC’s aggressively pro-crypto moves in recent months, Atkins’ comments Wednesday shed more light on the thinking behind those views. Namely, they underscored the SEC chair’s belief that only in situations where a third-party’s managerial efforts are absolutely essential to promises of an asset’s future value, should that asset be considered a security under the SEC’s stringent jurisdiction.

While many crypto tokens, if not most, are bought by holders in expectation of future profits, Atkins repeatedly clarified that a token should only be considered a security if purchasers are “expecting profits from the essential managerial efforts of others” due to promises from the issuer that also “must be explicit and unambiguous.”

Under such standards, the majority of crypto tokens trading today would likely not fall under the SEC’s jurisdiction. Further, in the instance that a crypto token does qualify as an investment contract by meeting that bar, it could again become a non-security after “the issuer either fulfills the representations or promises, fails to satisfy them, or they otherwise terminate.”

Atkins did note that “tokenized securities”—representations of securities already regulated by the SEC that trade on-chain—would remain regulated by the SEC.

But he also reiterated his support for the proliferation of “super-apps,” or platforms that allow securities and non-securities to easily trade under one roof. Atkins said Wednesday that he has asked his staff to prepare recommendations that would allow securities to trade on platforms not regulated by the SEC.

“While capital formation should continue to be overseen by the SEC, we should not hamstring innovation and investor choice by requiring the underlying assets to trade in one regulated environment versus another,” the chair said.

Atkins’ speech culminated with a reflection on the original purpose of the SEC, which was created in the wake of the Great Depression—and his view that the agency’s original mandate should not extend to cover most of the crypto industry.

“Congress crafted the securities laws to address specific problems—situations in which people part with their money based on promises that depend on the honesty and the competence of others,” Atkins said. “They were not designed as a universal charter to regulate every novel form of value, digital or otherwise.”