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Wednesday Nov 12 2025 18:10
2 min
US Securities and Exchange Commission (SEC) Chair Paul Atkins elaborated on the regulator's strategy for enforcing digital asset fraud under its “Project Crypto” initiative and pending legislation in Congress. During a speech at the Federal Reserve Bank of Philadelphia, Atkins provided insight into the agency’s modernization efforts for regulating digital assets.
Atkins stated that the SEC plans to consider “establishing a token taxonomy” in the near future, grounded in the Howey test, which the SEC uses to evaluate securities, to acknowledge that “investment contracts can come to an end.”
“Commissioner [Hester] Peirce has rightly observed that while a project’s token launch might initially involve an investment contract, those promises may not remain forever,” Atkins commented. He added that “once the investment contract can be understood to have run its course, the token may continue to trade, but those trades are no longer “securities transactions.”
Atkins clarified that during his leadership, the SEC would not classify digital commodities, digital collectibles, digital tools, and network tokens as securities. Tokenized securities, on the other hand, would continue to be regulated by the SEC.
“In the coming months, as contemplated in legislation currently before Congress, I hope that the Commission will also consider a package of exemptions to create a tailored offering regime for crypto assets that are part of or subject to an investment contract,” Atkins stated.
Addressing the market structure bill under consideration in the US Senate, the SEC chair stated:
“[This] is not a promise of lax enforcement at the SEC. Fraud is fraud. While the SEC protects investors from securities fraud, the federal government has a host of other regulatory bodies well equipped to police and protect against illicit conduct.”
Despite the US government shutdown, lawmakers in the House of Representatives were expected to vote on a funding bill, already passed by the Senate, aimed at funding the government through the end of January. The Senate remained in session during the shutdown, with some senators reportedly working on the market structure bill.
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