At the Wyoming Blockchain Symposium in Jackson Hole, SEC Chair Paul Atkins delivered a striking shift in tone on crypto regulation. He asserted that “very few tokens” could qualify as “securities”. He emphasized that the classification would hinge more on how a token is packaged and sold rather than the token itself.
Atkins’ statement might come as a surprise to crypto proponents as it marks a significant departure from former SEC Chair Gary Gensler’s stance. During Gensler’s tenure, a vast majority of crypto assets were deemed securities under the Howey Test.
What Is the Howey Test?
The Howey Test comes from the 1946 U.S. Supreme Court ruling that defined an “investment contract” and “security”. For example, Bitcoin, being decentralized and not relying on promoter efforts, typically fails the “common enterprise” and “efforts of others” criteria, suggesting it’s not a security under Howey’s definition. However, certain stablecoins or NFTs, especially those whose value depends on efforts by their issuing company, meet the said criteria and thus qualify as securities.
Also read: SEC to rejig sector-wide policies to encompass crypto assets: Paul Atkins
Commitment to implement reccos
Atkins also referenced the President’s Working Group on Digital Asset Markets, writing in an X post that the SEC is “setting out to implement [their recommendations] as soon as we can.” He went on to add that it marked a new day at SEC, reiterating President Donald Trump’s vision of ‘making America the crypto capital of the world.’
The SEC Chair spoke at length about the recently launched “Project Crypto”. He spoke of how the initiative aimed at modernizing securities rules for digital assets so that U.S. markets can “move on-chain. He said there could be tailored disclosures, exemptions, and safe harbors for token offerings such as ICOs, airdrops, and network rewards.
“Project Crypto” has also laid out plans to support “super-apps” that offer trading, staking, and lending in one place. This would bridge the gap between traditional and crypto assets and could be done under a single license. The initiative also aims to make it easier to use DeFi tools and tokenized securities.