SEC Chairman Unveils Crypto Framework to Separate Securities from Collectibles

Digital commodities, collectibles, and practical tokens fall outside the SEC’s oversight under Project Crypto.

US Securities and Exchange Commission (SEC) Chairman Paul Atkins has detailed the next phase of “Project Crypto,” which outlines how digital assets will be regulated under federal securities laws.

The effort builds on the work led by Commissioner Hester Peirce and the Crypto Task Force, which focuses on transparent and economically fair treatment of cryptocurrencies.

SEC makes it clear which tokens are not securities

In a recent speech, Atkins said talked about the uncertainty surrounding crypto classification over the past decade, explaining that most of it stems from the changing nature of digital assets. According to him, a cryptocurrency being part of an investment contract under the Howey test does not make it a permanent security, as such agreements can terminate. “I believe that most crypto tokens traded today are not securities themselves,” he said.

The new framework is based on a proposed token taxonomy that categorizes cryptocurrencies based on function and buyer expectations. Under this approach, digital commodities, or network tokens, are not classified as securities. Likewise, digital collectibles, such as NFTs, are also excluded from this category because buyers do not anticipate profits from the management efforts of others.

Digital tools that serve practical purposes, such as memberships, tickets, login credentials or identity verification, also fall outside the SEC’s oversight. On the other hand, tokenized securities are still regulated as securities.

Atkins further discussed the application of the Howey test, which identifies investment contracts as the injection of money into a joint venture with the expectation of making a profit from the efforts of others. He said that once the issuer fulfills, defaults on or terminates its management promises, the tokens can continue trading without being considered securities.

The initiative also includes plans for exemptions and a special offer for digital assets linked to investment contracts. The SEC will work with Congress, the Commodity Futures Trading Commission (CFTC), banking regulators and other stakeholders to create a regulatory environment that supports innovation while maintaining investor protection.

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Fraud remains subject to enforcement and anti-fraud provisions will also apply to tokens that are no longer classified as securities.

Shift to digital assets

First launched in July 2025, Project Crypto aims to provide clarity, fairness and integrity to developers, investors and intermediaries. Under the leadership of Atkins and Peirce, the initiative was started to differentiate between securities and other digital assets.

This week is proving crucial for those looking for clearer rules around crypto. On November 10, the Senate Agriculture Committee shared a draft plan to regulate digital assets. That same day, the US Treasury Department and the IRS issued guidelines allowing investing on crypto ETPs and passing on staking rewards to retail investors.