According to PYMNTS.com, SEC Chairman Paul Atkins gave a speech on November 12 proposing a four-tier taxonomy for crypto tokens that could fundamentally reshape U.S. regulation. Atkins explicitly stated that many tokens trading today are not securities and called the previous broad approach “not sustainable.” His framework categorizes tokens as digital commodities/network tokens, digital collectibles, digital tools, or tokenized securities – with only the last category being treated as traditional securities. The proposal would assign primary jurisdiction over digital asset transactions to the CFTC rather than the SEC. If adopted, this could dramatically reduce registration and disclosure burdens for most crypto projects while endorsing concepts like self-custody and “super-apps” that combine multiple services.
Wait, Is This The Same SEC?
Here’s the thing that makes me skeptical: this sounds like a complete 180 from the SEC we’ve known for years. Remember when every other enforcement action seemed to target another crypto project? Now suddenly the chair is saying most tokens aren’t securities? It’s either a massive policy shift or carefully calculated positioning. I can’t help but wonder if this is genuine regulatory evolution or just the SEC realizing its hammer-and-nail approach wasn’t working. The timing feels significant too – with other countries racing ahead with clearer frameworks, maybe the U.S. is finally feeling the competitive pressure.
The Devil’s in the Definitions
Atkins says “economic reality trumps labels,” which sounds reasonable until you realize we’re about to have endless debates about what constitutes “decentralized and functional” versus a security. Who gets to decide when a network token crosses that line? And what happens to the thousands of existing tokens that were launched during the ICO boom with clear profit expectations? This taxonomy creates more questions than it answers. Basically, we’re swapping one form of uncertainty for another – instead of “is it a security?” we’ll be arguing about which of these four buckets something fits into.
CFTC vs SEC Turf War
The most interesting part of this proposal might be what it says about inter-agency politics. By suggesting the CFTC should have primary jurisdiction over digital asset transactions, Atkins is essentially acknowledging that the SEC’s traditional framework doesn’t fit crypto well. But let’s be real – government agencies don’t typically volunteer to give up power. Is this a genuine recognition that commodities regulation fits better? Or is it the SEC trying to offload a regulatory headache it can’t solve? Either way, we’re looking at a potential bureaucratic battle that could stall actual progress for years.
So What Actually Changes?
Look, speeches are nice, but they don’t change regulations. Until we see actual rule-making or legislation, this is just another opinion from another SEC chair. Remember how many “crypto clarifications” we’ve heard over the years that led nowhere? The real test will be whether this taxonomy shows up in enforcement decisions or gets incorporated into formal guidance. And even then, we’re probably looking at years of court challenges as projects fight over these classifications. The crypto industry should be cautiously optimistic, but keep those legal budgets intact.
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