New guidance defines token categories and explains how non-securities may still qualify as investment contracts under specific marketing conditions.
The U.S. Securities and Exchange Commission clarified what kinds of cryptocurrencies are considered securities and how a “non-security” digital asset could still qualify as an investment contract under specific conditions.
Paul Atkins, chair of the SEC, said the agency should consider a safe harbor proposal that would give cryptocurrency agency “bespoke pathways” to raise capital while maintaining necessary investor protections. Speaking at a gathering organized by the cryptocurrency trade group in Washington, D.C. "It's long past time for us to stop diagnosing the problem and start delivering the solution," stated Atkins of the Digital Chamber.
The U.S. Commodity Futures Trading Commission adopted the SEC’s interpretation, dividing cryptocurrency tokens into five categories: digital commodities, digital collectibles, digital tools, stablecoins, and digital securities. The agency noted that federal securities laws apply only to digital securities. The SEC also stated that even if a cryptocurrency is initially classified as a non-security, it may still fall under securities laws if it is marketed in a way that encourages investment in a joint venture with an expectation of profit.
Under Atkins, the SEC has outlined proposals to adjust capital markets rules to accommodate blockchain-based trading and cryptocurrencies. He emphasized that most cryptocurrencies do not qualify as securities, which would otherwise require SEC registration and disclosures. For years, the cryptocurrency industry has argued that existing U.S. laws are not suited to digital assets and has called for clearer regulations to define whether a token is a commodity, a security, or another category such as a stablecoin.
Atkins also introduced a safe harbor proposal aimed at supporting token sales and fundraising. He suggested a “fit-for-purpose startup exemption” that would allow crypto entrepreneurs to raise a limited amount of capital or operate for a defined period without full regulatory requirements. He expects the SEC to release the proposal for public comment in the coming weeks, including an innovation exemption to support new business models. Thus, Business Fortune is of the view that the SEC’s evolving stance signals a turning point for the crypto industry, where clearer classifications and tailored regulations could finally bridge innovation with investor protection.
