Paul Atkins, chairman of the US Securities and Exchange Commission, says the regulator is considering a new framework for classifying digital assets.
Summary
- Paul Atkins says the regulator is considering a new framework for the classification of digital assets.
- The SEC chairman says there is a symbolic taxonomy that is “anchored in long history.” How investment contract” securities analysis is critical.
- Digital commodities or network tokens, digital collectibles, and digital tools are not securities, but tokenized securities are.
While speak at the Federal Reserve Bank of Philadelphia, Atkins recalled “Project Crypto,” an initiative the agency rolled out earlier this year as part of the new regulatory shift under President Donald Trump.
According to Atkins, the goal is to distinguish between the types of cryptocurrencies, indicating which are subject to securities laws and which are not. The SEC plans to take this approach amid broader support for the legislative efforts underway in Congress.
“I expect that in the coming months the Commission will consider establishing a symbolic taxonomy anchored in the long-standing one How analysis of investment contracts, recognizing that there are limiting principles in our laws and regulations,” said the chairman of the SEC.
While the agency continues to ensure that market participants adhere to investor protection principles and laws, Atkins says most cryptocurrencies do not qualify as securities on their own.
What does Atkins think?
The SEC chairman outlined four categories: digital commodities or network tokens, digital collectibles, digital tools and tokenized securities.
It is the classification that Atkins believes will help form a “coherent symbolic taxonomy.”
“This framework follows months of roundtable discussions, more than a hundred meetings with industry participants and hundreds of written submissions from the public,” Atkins said.
According to this classification, digital commodities, or network tokens, are not securities. The same applies to digital collectibles and digital tools, as purchasers of these assets do not expect “profit from the essential management efforts of others.”
However, tokenized securities are securities because they represent ownership of a financial instrument.
But Atkins says not every token that meets the investment contract’s classification at the time of sale will remain a security forever.
“Once it can be understood that the investment contract has run its course, the token can continue to trade, but these transactions are no longer “securities transactions” simply by virtue of the token’s origin story,” he added.
#SEC #Chairman #Paul #Atkins #outlines #classification #crypto #tokens