SEC Narrows Crypto Securities Scope Amid Regulatory Shift

SEC Chair Paul Atkins has signaled a significant shift in the U.S. Securities and Exchange Commission’s (SEC) approach to regulating crypto tokens, stating that only a small number of such assets should be considered securities. Speaking at the Wyoming Blockchain Symposium on August 19, 2025, Atkins emphasized that the classification of a token as a security depends not just on its structure but also on the context of its sale and use [1]. This marks a departure from the previous stance under former SEC Chair Gary Gensler, who classified the “vast majority” of crypto tokens as securities using the Howey test [2].

Atkins explained that the SEC would no longer automatically treat crypto tokens as securities. Instead, the agency will take a more nuanced approach, examining the full context of token offerings before determining regulatory applicability [3]. This new stance aligns with the broader effort to clarify the regulatory landscape for digital assets, which has long been a source of uncertainty for investors and businesses alike.

Congress is also advancing legislation aimed at providing clarity to the U.S. crypto market. The House of Representatives passed the Digital Asset Market Clarity (CLARITY) Act in July 2025, a move intended to define and regulate digital assets more clearly [4]. Additionally, Senate Banking Committee Chair Tim Scott has expressed bipartisan support for upcoming market structure legislation, indicating potential cross-party agreement on the need for regulatory clarity [5].

Atkins also highlighted the SEC’s Project Crypto initiative, which aims to develop regulatory frameworks for blockchain-based tokens. The goal, according to Atkins, is to protect investors while fostering innovation in the crypto space [6]. This approach suggests a more tailored and less rigid regulatory environment compared to previous efforts.

The comments from Atkins reflect a broader trend of regulatory flexibility in the U.S. as lawmakers and regulators seek to balance oversight with innovation. By narrowing the scope of which tokens qualify as securities, the SEC aims to reduce legal ambiguity and encourage responsible development in the crypto sector. However, this shift may also raise questions about enforcement consistency and investor protection, particularly in cases where the boundaries between securities and utility tokens remain unclear.

Source:

[1] [SEC Chair: 'There Are Very Few Tokens That Are Securities](https://www.cryptotimes.io/2025/08/20/sec-chair-atkins-says-few-crypto-tokens-are-treated-as-securities/)

[2] [Most Crypto Tokens Should Not Be Treated as Securities - SEC Chair Says](https://www.law.com/nationallawjournal/2025/08/19/most-crypto-tokens-should-not-be-treated-as-securities-sec-chair-says/)

[3] [SEC Chair Paul Atkins Says Most Crypto Tokens Are Not Securities](https://coincentral.com/sec-chair-paul-atkins-says-most-crypto-tokens-are-not-securities/)

[6] [SEC Launches President's Digital Assets Group to Modernize Crypto Regulation](https://www.ainvest.com/news/sec-launches-president-digital-assets-group-modernize-crypto-regulation-2508/)