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SEC Chairman Paul Atkins set out plans for a new token taxonomy that could reshape how US regulators treat crypto assets. Speaking at the Federal Reserve Bank of Philadelphia’s Fintech Conference on 12 November 2025, he described “Project Crypto” as an effort to align digital asset regulation with existing securities law while giving developers clearer rules.
Atkins said the framework will rely on the Howey Test, the long-standing standard for deciding when an arrangement counts as an investment contract. He argued that the test focuses on the promises and efforts of issuers, not on technology labels such as “token” or “NFT.” Industry groups have long pressed the SEC for clearer crypto rules.
Under the proposed token taxonomy, the SEC would distinguish between several categories of digital assets. Atkins said “digital commodities” or “network tokens” tied to functional and decentralized systems should not fall under securities rules. He also placed “digital collectibles,” such as art, in-game items, or media, outside securities regulation, along with “digital tools” like memberships, tickets, and credentials.
By contrast, “tokenized securities” would remain subject to securities law because they represent traditional financial instruments such as stocks or bonds recorded on a blockchain. Paul Atkins stressed that a stock, note, or bond does not change its legal nature when represented as a token.
He emphasized that economic reality should guide crypto regulation. According to Atkins, market participants should look at what rights a token conveys and what promises accompany its sale, rather than rely on branding or marketing language.
Atkins stated that most crypto tokens trading today do not qualify as securities in themselves, although some launches may involve securities offerings. In those cases, the token forms part of an investment contract that hinges on the issuer’s explicit and unambiguous commitments to carry out essential managerial efforts.
He argued that investment contracts can end. Networks can mature, code can ship, control can spread, and issuer influence can fade. When buyers no longer reasonably expect profits from a particular team’s efforts, Atkins said ongoing token trading should no longer count as a securities transaction solely because of the token’s origin.
The SEC’s crypto framework, he added, will seek to support innovation while maintaining strict action against fraud. Atkins said he has asked staff to design exemptions and a tailored offering regime for crypto assets, and to consider ways for tokens linked to investment contracts to trade on platforms overseen by the CFTC or state regulators. He also pledged to coordinate with Congress and other agencies so that digital asset rules remain clear, consistent, and grounded in law.
