SEC Signals Most Crypto Tokens Are Not Securities Amid Regulatory Shift

The U.S. Securities and Exchange Commission (SEC) has signaled a major shift in its regulatory approach to crypto assets. In a notable departure from its previous enforcement-focused strategy, SEC Chair Paul Atkins stated that the vast majority of crypto tokens are not securities under U.S. law. During a recent speech at the Wyoming Blockchain Symposium, Atkins emphasized that a token “by itself is probably not” a security, and only a “very few” tokens could meet the criteria for classification as such [1]. This represents a potential softening of the SEC’s stance, which has been criticized for creating uncertainty and hindering innovation in the U.S. crypto market.

Atkins’ comments highlight a move toward evaluating tokens based on their specific context and use case rather than applying a one-size-fits-all approach. He pointed out that a token’s classification depends on the investment contract or framework that may surround it, rather than the token itself. This nuanced interpretation aligns with a broader shift in how the SEC is approaching the application of the Howey Test, which has traditionally been used to determine whether an investment qualifies as a security [2]. The change could lead to greater clarity for market participants, including startups and investors, who have long struggled with the ambiguity of SEC enforcement actions.

To support this regulatory evolution, the SEC has launched “Project Crypto,” an initiative designed to modernize securities laws to better accommodate blockchain technology and digital assets. According to Atkins, the project aims to “move U.S. markets on-chain,” creating a regulatory environment that is both transparent and adaptable [3]. This initiative reflects a broader effort to future-proof the U.S. financial system against what Atkins described as “regulatory mischief” and to align with the dynamic nature of decentralized finance.

The timing of Project Crypto coincides with a 168-page report from the Trump administration, which recommends reducing regulatory burdens for crypto businesses and encouraging innovation in the sector. This coordinated approach suggests a unified effort to foster a more supportive regulatory environment for digital asset companies [4]. Already, industry stakeholders have begun advocating for specific exemptions that would protect developers from enforcement actions, signaling that the market is responding with optimism to the new direction.

Atkins’ remarks have been widely interpreted as a sign that the SEC is moving away from its historically aggressive enforcement strategy and toward one that is more innovation-friendly. This shift could have significant market implications, including increased liquidity, reduced restrictions on trading, and a more welcoming environment for crypto startups and projects [5]. The reclassification of most tokens as non-securities may also clarify the division of regulatory responsibilities between the SEC and the Commodity Futures Trading Commission (CFTC), potentially reducing overlap and confusion in the regulatory landscape [6].

The industry has reacted positively to the news, with many viewing it as a long-awaited step toward regulatory clarity. The comments come during a period often referred to as the “Summer of Stablecoins,” a time marked by increased interest in stablecoins and their growing role in the broader financial ecosystem [7]. The SEC’s evolving stance supports the view that digital assets should be evaluated on a case-by-case basis rather than subjected to blanket regulatory rules.

Overall, the SEC’s shift in tone and approach represents a significant development for the crypto market. By emphasizing context, launching modernization efforts, and signaling a willingness to adapt regulations, the agency is potentially laying the groundwork for a more stable and competitive environment for digital assets in the United States.

Sources:

[1] AInvest - [https://www.ainvest.com/news/sec-shifts-crypto-stance-emphasizes-tokens-securities-2508/](https://www.ainvest.com/news/sec-shifts-crypto-stance-emphasizes-tokens-securities-2508/)

[2] Decrypt - [https://decrypt.co/335848/sec-chair-atkins-doubles-down-project-crypto-embrace-innovation](https://decrypt.co/335848/sec-chair-atkins-doubles-down-project-crypto-embrace-innovation)

[5] The Shib Daily - [https://news.shib.io/2025/08/20/sec-signals-most-tokens-arent-securities-what-it-means-for-shib-holders/](https://news.shib.io/2025/08/20/sec-signals-most-tokens-arent-securities-what-it-means-for-shib-holders/)

[6] OpenExO - [https://openexo.com/l/3b236d34](https://openexo.com/l/3b236d34)

[7] Investopedia - [https://www.investopedia.com/it-s-been-the-summer-of-stablecoins-goldman-says-will-traditional-finance-be-upended-11793816](https://www.investopedia.com/it-s-been-the-summer-of-stablecoins-goldman-says-will-traditional-finance-be-upended-11793816)