SEC Outlines Their Plan to Bring Digital Asset Clarity

By Braeden Anderson

SEC Chair Paul S. Atkins’ recent remarks on Nov. 12, 2025 at the Federal Reserve Bank of Philadelphia signal one of the most constructive regulatory developments the digital asset industry has seen in years. His “Project Crypto” framework reflects a meaningful shift toward clarity, predictability, and principled application of the federal securities laws. For innovators, investors, and market participants, this is an encouraging moment. We are seeing real movement toward rules that make sense for today’s technology while respecting the boundaries of the securities statutes.

Atkins opened by acknowledging the confusion that has long surrounded crypto regulation and challenged the rigid assumption that all tokens must be treated as securities simply because they once appeared in an investment-contract transaction. He reaffirmed that many tokens trading today are not securities in themselves, even if they were distributed through fundraising arrangements. This represents welcome alignment with longstanding legal principles and a more practical understanding of how modern networks function.

A Four-Part Token Taxonomy

The Chair previewed a categorization model the Commission will evaluate, separating digital assets into four functional groups:

• Digital commodities / network tokens, where value derives from a decentralized, operational network rather than the managerial efforts of a promoter.

• Digital collectibles connected to creative works, gaming, or digital culture, purchased without reliance on an issuer’s efforts.

• Digital tools used for access, credentials, membership, or identity.

• Tokenized securities, which represent traditional financial instruments maintained on a blockchain and remain securities under the law.

We view this approach as a constructive step. It acknowledges that not all tokens are alike, and it gives builders and investors a clearer sense of where their projects may fit.

Howey and the End of an Investment Contract

Atkins reiterated that the Howey test remains central, but only where explicit promises of essential managerial efforts exist. Those promises can be fulfilled or terminate. When they do, the investment contract ends, and the token does not remain a security forever. This interpretation aligns with both the letter of the law and the realities of network maturation. It also provides much-needed daylight for projects that have long since moved beyond their initial capital-raising stage.

The SEC is even considering pathways that would allow tokens once tied to investment contracts to trade on non-SEC platforms once the contractual obligations conclude, including intermediaries regulated by the CFTC or state authorities. This is a notable development, as market participants have long argued that the regulatory treatment of a particular token can change over time as the project’s infrastructure develops, and becomes more decentralized.

Legislative Support and Tailored Offering Paths

Atkins expressed strong support for Congressional action on crypto market-structure legislation. Clarity at the statutory level would give builders and financial institutions durable rules of the road. Meanwhile, he has asked SEC staff to prepare a set of offering exemptions specific to tokens associated with investment contracts, aimed at promoting capital formation without compromising investor protection.

These efforts are important. They represent some of the most constructive signals we have seen from federal regulators in years, and they create new opportunities for compliant innovation.

Enforcement Continues, but Clarity Benefits Everyone

Atkins was careful to note that none of this weakens enforcement. Fraud will continue to be prosecuted, and both the SEC and CFTC retain anti-fraud and anti-manipulation authority. But clearer categories and clearer standards help honest participants, protect investors, and reduce the need for regulation through enforcement alone.

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A Positive Step for Builders, Investors, and the U.S. Market

Taken together, Atkins’ remarks represent a promising evolution in digital asset oversight. For the industry, this marks another encouraging development in what has been a steadily improving regulatory landscape.

Our firm represents clients across the spectrum of the digital asset ecosystem, including token issuers, exchanges, financial institutions, and emerging technology platforms. We are excited by these developments and the new opportunities they create for responsible growth and innovation in the United States.

If you have questions about how Project Crypto may affect your business or upcoming initiatives, please feel free to contact us. We are here to help you navigate this evolving environment with confidence.

SEC Source:

Paul S. Atkins, “The SEC’s Approach to Digital Assets: Inside ‘Project Crypto,’” Speech at the Federal Reserve Bank of Philadelphia, Nov. 12, 2025. (U.S. Securities and Exchange Commission)