SEC Undergoes Major Crypto Regulatory Shift Amid Market Response

The U.S. Securities and Exchange Commission (SEC) is recalibrating its regulatory approach to cryptocurrency, with Chair Paul Atkins stating that “there are very few tokens that are securities” [1]. This marks a significant departure from the prior administration under former SEC Chair Gary Gensler, who frequently classified most crypto tokens as securities under the Howey test [1]. Speaking at the Wyoming Blockchain Symposium in Jackson Hole, Atkins emphasized that the classification of a token as a security depends on the broader context of how it is structured and marketed, rather than the token itself [1].

Atkins also outlined the SEC’s “Project Crypto” initiative, which aims to develop a regulatory framework tailored to digital assets. He indicated that the agency will proceed independently in defining its approach, even as Congress works to establish legislative structures for the crypto market. The House recently passed the Digital Asset Market Clarity (CLARITY) Act, and the Senate Banking Committee has signaled its intent to follow suit [1].

The shift in tone reflects a broader effort to balance investor protection with fostering innovation in the crypto space. Atkins noted that the SEC is exploring a division of responsibilities with the Commodity Futures Trading Commission (CFTC), under which tokens deemed securities would fall under the SEC’s jurisdiction, while those considered commodities would be regulated by the CFTC [3]. This move is expected to streamline oversight and reduce regulatory ambiguity.

Analysts suggest that this evolving stance could have profound implications for crypto projects, particularly those previously subject to securities law enforcement. While the new approach is broadly welcomed by industry participants, questions remain about the specific criteria the SEC will use to determine whether a token qualifies as a security [8].

Atkins also highlighted the administration’s broader strategic objective to position the U.S. as a global leader in crypto innovation, aligning with the policy direction set by President Donald Trump [5]. This emphasis on innovation-friendly regulation contrasts with the more rigid enforcement stance of the previous administration and signals a potential realignment of regulatory priorities.

The market has already shown some response to the changing rhetoric. For example, a governance token loosely associated with the SEC chair saw a 13% increase following its listing on a major exchange [7]. While this movement may or may not be directly linked to regulatory statements, it underscores the heightened attention the market is paying to policy developments.

As the SEC continues to refine its framework, market participants are closely watching for further guidance, particularly as the Senate returns from recess and lawmakers work to finalize the CLARITY Act [1]. The agency’s evolving stance, while still in its early stages, represents a pivotal shift in how digital assets are regulated in the United States.

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Source:

[1] SEC Chair: 'There Are Very Few Tokens That Are Securities' (https://cointelegraph.com/news/tokens-securities-sec-chair-paul-atkins-wyoming)

[3] SEC Moves Forward With Crypto Regulation Following (https://www.mitrade.com/au/insights/news/live-news/article-3-1051991-20250820)

[5] SEC Shifts Gears: Paul Atkins Signals New U.S. Crypto Regulation Ahead (https://news.shib.io/2025/08/18/sec-shifts-gears-paul-atkins-signals-new-u-s-crypto-regulation-ahead/)

[7] Paul Atkins' loosely linked RSR token rises 13% after (http://www.msn.com/en-us/money/markets/paul-atkins-loosely-linked-rsr-token-rises-13-after-coinbase-listing/ar-AA1Dm1d1?apiversion=v2&batchservertelemetry=1&domshim=1&noservercache=1&noservertelemetry=1&renderwebcomponents=1&wcseo=1)

[8] Crypto Is About to Change FOREVER… Thanks to the CFTC! (https://medium.com/@dominalt/crypto-is-about-to-change-forever-thanks-to-the-cftc-6d7645a56477)