SEC Shifts Crypto Stance: Only Small Percentage of Tokens Are Securities

SEC Chair Paul S. Atkins has signaled a significant shift in the U.S. Securities and Exchange Commission’s (SEC) approach to regulating crypto tokens, suggesting that only a “very small percentage” of tokens qualify as securities. His remarks, delivered at the Wyoming Blockchain Symposium, emphasize that the classification of a token hinges on its “package” — specifically, how it is marketed, sold, and structured — rather than the code or technical nature of the token alone [1]. This marks a departure from previous regulatory broadbrush tactics and points toward a more nuanced framework grounded in transactional circumstances and distribution mechanisms [2].

Atkins noted that the SEC will “plow forward” with the understanding that a token is “probably not” a security on its own, a stance that aligns with recent staff guidance indicating that certain liquid staking arrangements do not constitute the sale of securities [1]. The guidance, issued by the SEC’s Corporation Finance staff, characterizes liquid staking as a modern form of receipt for deposited assets. This clarification adds a layer of regulatory certainty for market participants while formal rulemaking processes are still underway [1].

The chair’s remarks have been interpreted by market observers as a potential easing of the regulatory burden on token projects, though enforcement of fraudulent schemes will remain a priority [1]. Developers and exchanges are being encouraged to focus more on functional design, decentralization, and transparency, rather than relying on headlines or marketing claims. Atkins emphasized that “just the token itself is not necessarily the security,” a statement that supports innovation while raising expectations for responsible fundraising and secondary market conduct [1].

Looking ahead, the SEC is likely to release additional staff statements, concept releases, and proposed rules to outline clear regulatory pathways for custody, disclosures, and token distribution. The commission is expected to codify these views in the near to medium term, with potential long-term benefits for on-chain market infrastructure, assuming alignment with existing banking, commodities, and payment regimes [1].

From a policy perspective, the shift represents a more transaction-focused test, which could lead to improved disclosures for token launches and a clearer distinction between utility and capital generation. Projects that align with these standards may gain more traction, while those driven by speculative hype could face higher regulatory scrutiny [1].

The message from the SEC is clear: token projects must be designed and disclosed with responsibility, and regulatory scrutiny will focus on behavior and business practices rather than solely on the underlying code. This approach signals a more adaptive and innovation-friendly posture from the commission, while maintaining a firm stance against misconduct [1].

Sources: [1] SEC Chair Atkins Narrows the Field: ‘Very Few Tokens Are Securities’ (https://coinmarketcap.com/community/articles/68a5b2dea43e08132deffe18/)