By Frances Yue
Most crypto assets are not securities, says SEC’s Atkins
A sweeping policy initiative announced by Wall Street’s top regulator on Thursday was cheered by crypto-industry participants, who hailed what they said was its potential to not only rewrite the rule book for digital assets but to also transform financial markets.
The unveiling of the plan by Securities and Exchange Commission Chairman Paul Atkins, referred to as “Project Crypto,” follows the release of a 160-page report on Wednesday by President Donald Trump’s crypto working group that outlines regulatory recommendations to strengthen U.S. leadership in digital assets, safeguard self-custody and decentralized finance, which refers to financial services that operate without intermediaries.
“I think it’s the signal of a start of a major new era for crypto. It’s a very bullish era. It’s one with reduced risk and increased opportunity,” said Matt Hougan, chief investment officer at crypto asset manager Bitwise Asset Management.
As part of the initiative, Atkins said he has directed the SEC’s staff to develop clear guidelines to help market participants determine whether a crypto asset qualifies as a security or falls under an investment contract. “Despite what the SEC has said in the past, most crypto assets are not securities,” Atkins said in remarks Thursday.
Atkins is also advocating for rules that would enable so-called “super-apps.” These platforms would allow broker-dealers to offer a wide range of services including trading in securities and non-security crypto assets, staking and lending, under a single license.
Additionally, Atkins has called on staff to update regulations to support the integration of on-chain software systems, including DeFi, into U.S. securities markets. He also instructed the agency to work closely with firms aiming to distribute tokenized securities in the U.S. and “to provide relief where appropriate to assure that Americans are not left behind.”
Furthermore, the SEC chair has asked staff to propose tailored disclosures, exemptions and safe harbors for activities such as initial coin offerings, airdrops and network rewards.
Here are four key things for investors to know:
Regulatory clarity for crypto firms
SEC’s new agenda further lowers the regulatory risks facing crypto firms, as it marks a significant departure from prior SEC Chair Gary Gensler’s approach, according to Louis LaValle, co-founder and chief executive at Frontier Investments.
Many crypto-market participants viewed Gensler’s stance on digital assets as hostile, as the SEC under his leadership alleged that multiple cryptocurrencies were securities and pursued legal action against several companies.
“I think this is the first time in modern history the SEC is being used not just to interpret or enforce financial policy, but to reverse it outright. The Gensler-era framework isn’t being adjusted – it’s being dismantled,” LaValle said in emailed comments.
U.S. crypto leadership role
Atkins’s new policies also have the potential to bring back crypto companies and projects that exited the U.S. during Gensler’s tenure, said Alexander Blume, chief executive at crypto trading firm Two Prime. Gensler’s regulatory approach prompted some firms to relocate to more crypto-friendly jurisdictions, Blume noted.
More companies may also feel more comfortable launching crypto-related products in the U.S., said Nathan Allman, chief executive of tokenization firm Ondo Finance.
“We get asked all the time, like, ‘when can we bring our products to the US?’ And it’s always been a little bit sad. As an American company we have to geofence our products from U.S. users and do everything we can to keep us people out,” Allman said.
And the implications of Atkins’s agenda extend beyond digital assets alone, as Atkins’s move “wasn’t just about crypto,” said LaValle, pointing to the global race among jurisdictions to establish regulatory frameworks for digital assets and tokenization.
“This is about positioning the U.S. to lead the next era of capital markets. The tone was geopolitical,” LaValle said, suggesting that the broader goal is to reassert American dominance in financial innovation.
Acceleration of tokenization
One of the areas where regulatory support could have an immediate impact is tokenization, or the process of moving traditional financial assets onto the blockchain.
The SEC’s new policy agenda could accelerate this transition across U.S. capital markets, a shift that crypto advocates believe would boost market efficiency by enabling increased liquidity, faster settlement and enhanced transparency, according to Bitwise’s Hougan.
Hougan said that tokenization had been held back by two key obstacles: One was that blockchain technology wasn’t fast or efficient enough, and the other was a harsh, unfriendly stance from regulators.
Now, both barriers are fading. “We now have the opposite from the regulatory perspective, and the infrastructure is much better than it was,” noted Hougan.
Appreciation of crypto prices
Hougan added that the SEC’s new direction could also drive long-term gains in crypto prices.
“These regulatory shifts are not just short-term changes. Their impact will be felt over the next five to 10 years. I don’t think the market has fully priced all this in,” he said.
Regulatory tailwinds have already pushed bitcoin higher this year, as the cryptocurrency has repeatedly hit new all-time highs and is up 26% year to date. Bitcoin (BTCUSD) rose 0.6% to trade around $117,592 as of Thursday afternoon, according to FactSet.
Still, many smaller cryptocurrencies remain well below their historical peaks. Ether (ETHUSD) traded around $3,771 on Thursday afternoon, roughly 22.5% below its record high of $4,865.81 set on Nov. 10, 2021.
-Frances Yue
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07-31-25 1651ET
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