SEC Chair Paul Atkins has introduced a new crypto framework that classifies most digital assets like ETH, SOL, and XRP as non-securities, focusing on network tokens, digital collectibles, and practical tools to promote innovation while protecting investors.
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Network tokens such as Ethereum (ETH) and Solana (SOL) function in decentralized systems without profit expectations from issuers, exempting them from securities rules.
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Digital collectibles like NFTs emphasize ownership and creativity, not investment returns, placing them outside SEC oversight.
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Classification relies on the Howey Test, with issuers given up to six months to address compliance; this shift aligns with evolving blockchain maturity, per Atkins’ November 2025 remarks.
Discover SEC Chair Paul Atkins’ breakthrough crypto framework classifying tokens as non-securities. Explore network tokens like ETH and SOL, plus FAQs on implications for investors. Stay ahead in crypto regulation—read now for clarity on your assets.
What is the SEC’s New Crypto Framework Under Paul Atkins?
The SEC’s new crypto framework, unveiled by Chair Paul Atkins, establishes a token taxonomy to determine whether digital assets qualify as securities under U.S. law. This policy shift, announced at the Federal Reserve Bank of Philadelphia’s Fintech Conference on November 12, 2025, moves away from aggressive enforcement toward clearer guidelines based on the Howey Test. It aims to balance investor protection with fostering blockchain innovation by categorizing most cryptocurrencies like Ethereum (ETH), Solana (SOL), and XRP as non-securities.
Atkins emphasized that the framework recognizes how digital networks mature over time, reducing the role of centralized issuers and shifting tokens from potential investment contracts to functional assets. This approach provides regulatory certainty, allowing market participants to operate within defined boundaries without fear of retroactive classification. By grounding decisions in context and issuer promises, the SEC seeks to avoid overreach while upholding its mandate.
The announcement marks a departure from the prior administration’s stance under Gary Gensler, which often treated broad swaths of crypto as unregistered securities. Atkins’ vision, informed by legal precedents like the original Howey case from 1946, applies securities principles specifically to arrangements involving profit expectations from managerial efforts, not the assets themselves once networks decentralize.
How Does Token Classification Work in the New SEC Framework?
In the new SEC crypto framework, classification hinges on the Howey Test, which evaluates if an asset involves an investment of money in a common enterprise with expectations of profits from others’ efforts. Atkins clarified that network tokens—such as those powering blockchains like Ethereum or Solana—typically do not meet this criterion once decentralized, as users participate for utility rather than issuer-driven returns.
For instance, Atkins noted that tokens like XRP, used for facilitating transactions on the Ripple network, evolve from initial offerings to integral ecosystem components. Data from blockchain analytics firm Chainalysis indicates that over 80% of major cryptocurrencies now operate in fully decentralized environments, supporting the framework’s emphasis on maturity. Expert analysts, including those from the Blockchain Association, have praised this as a “long-overdue clarification” that could unlock billions in institutional investment.
Atkins also introduced a grace period of up to six months for issuers to rectify compliance issues, reducing enforcement actions. He warned, however, that tokens marketed with explicit profit promises remain securities. This nuanced view, drawn from SEC consultations and congressional hearings, ensures decisions are fact-specific: a token’s technical features alone do not dictate status; issuer conduct and buyer expectations do. Supporting statistics from the President’s Working Group on Financial Markets highlight that unclear rules have stifled U.S. crypto growth, with $2.5 trillion in global market cap largely developed abroad.
Tokenized traditional assets, like real estate fractions or stock equivalents, stay under SEC jurisdiction as they represent ownership in regulated instruments. Atkins referenced ongoing Treasury guidance on staking for exchange-traded products, signaling coordination across agencies. Legal scholars, such as those cited in Harvard Law Review discussions, argue this framework aligns with statutory limits, preventing the SEC from claiming authority over all innovation.
Frequently Asked Questions
What Does the SEC Crypto Framework Mean for Ethereum and Similar Tokens?
The new SEC crypto framework classifies Ethereum (ETH) and similar tokens as network assets, not securities, once their ecosystems decentralize. This means holders face reduced regulatory risks for trading or using ETH on decentralized finance platforms. Atkins’ policy, effective immediately, supports innovation by confirming that mature blockchains like Ethereum’s do not trigger Howey Test violations, benefiting developers and users alike.
Are NFTs Considered Securities Under Paul Atkins’ Guidelines?
No, NFTs under Paul Atkins’ guidelines are treated as digital collectibles, focusing on ownership of unique items like art or music rather than profit from issuers. This natural classification allows creators to mint and sell without securities registration, as long as no investment promises are made. It’s a straightforward rule: utility and creativity trump speculation, making the crypto market more accessible for artists and collectors.
Key Takeaways
- Shift to Token Taxonomy: The framework categorizes assets into network tokens, collectibles, and tools, applying the Howey Test contextually to exempt most cryptos like SOL from securities status.
- Grace Period for Compliance: Issuers get up to six months to align with rules, minimizing enforcement and encouraging proactive adjustments in line with network evolution.
- Balanced Regulation: Prioritizes investor safeguards while promoting U.S. leadership in blockchain; stakeholders should review issuer promises to ensure non-security treatment.
Conclusion
The SEC’s new crypto framework under Chair Paul Atkins represents a pivotal evolution in regulating digital assets, clearly distinguishing network tokens like ETH and SOL from securities through a Howey Test-based taxonomy. By emphasizing context, maturity, and utility over blanket enforcement, it fosters a predictable environment that could spur domestic innovation and attract global capital. As Congress advances digital asset legislation, market participants are encouraged to consult legal experts and monitor updates to capitalize on this clarity—positioning the U.S. as a hub for responsible crypto growth in the years ahead.
