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SEC Chair Paul Atkins Wants 'Token Taxonomy' for Crypto Assets
The initiative would classify tokens under the Howey Test.
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SEC Chair Paul Atkins unveiled plans to establish a formal “token taxonomy” that would clarify which digital assets qualify as securities under U.S. law. The move, The Block reports, signals a major policy pivot from the enforcement-heavy approach under former Chair Gary Gensler.
What’s the Scoop?
- Rooted in the Howey Test: Atkins said the taxonomy will be anchored in the 1946 Supreme Court decision that defines investment contracts. The framework aims to give clearer criteria for when cryptocurrencies are securities and when they might evolve beyond that classification.
- Evolving classification: “Networks mature. Code is shipped. Control disperses,” Atkins said, noting that some tokens may begin as securities but later function as commodities or utilities once issuer control fades.
- Not a deregulatory shift: Atkins stressed that the new framework is “not a promise of lax enforcement,” adding, “Fraud is fraud.” The SEC will continue pursuing bad actors even as it updates its crypto rules under “Project Crypto.”