SEC’s Atkins Declares: ‘Most Crypto Assets Are Not Securities’ Under Bold New Vision.

July 31, 2025 – Washington, D.C. — In a landmark policy shift, SEC Commissioner Paul Atkins declared that most digital assets should not be classified as securities under a reimagined regulatory framework. His comments, made during a high-profile address at the Digital Finance Leadership Summit, mark a significant departure from the agency’s historically cautious stance toward the crypto industry.

Atkins, a longtime proponent of market-based innovation, outlined what he called a “practical, principles-based approach” to regulating digital assets—one that prioritizes clarity, investor protection, and global competitiveness without stifling technological advancement.

“A blanket approach to crypto as securities is not only outdated—it’s economically counterproductive,” Atkins stated. “Most digital assets function more like commodities, utilities, or stores of value, and our regulatory model must reflect that reality.”

A Turning Point in U.S. Crypto Policy

Atkins’ remarks come amid mounting pressure on the SEC to clarify its stance on crypto classification, particularly following recent legislative developments including the CLARITY Act and the GENIUS Act. These bills aim to establish jurisdictional boundaries between the SEC and the Commodity Futures Trading Commission (CFTC), and provide a comprehensive framework for digital assets.

Atkins aligned himself with this reformist momentum, calling for a shift away from regulation by enforcement—an approach that has created confusion among market participants—and toward proactive rulemaking based on asset function, decentralization, and economic use case.

Key Elements of Atkins’ Vision

  1. Function Over Form: Atkins emphasized that token classification should be based on actual market function—such as payments, governance, or protocol utility—rather than rigid, legacy interpretations of the Howey Test.

  2. Dynamic Regulatory Categories: Under his proposed model, digital assets could shift regulatory classification over time as they decentralize or evolve in utility, similar to how private equities transition into public markets.

  3. Safe Harbor for Early Projects: Atkins voiced strong support for a regulatory safe harbor that would allow emerging projects a grace period to build decentralized networks without the immediate threat of enforcement action.

  4. Enhanced Coordination with CFTC: The Commissioner called for formal interagency coordination to ensure that the classification of assets such as Bitcoin, Ether, and other decentralized tokens remains consistent and predictable across regulators.

Industry Reaction

The crypto industry responded swiftly and positively to Atkins’ remarks. Leaders from Coinbase, Kraken, and a range of DeFi protocols praised the Commissioner’s call for a more nuanced framework.

“Commissioner Atkins is offering the kind of regulatory clarity this industry has needed for years,” said Sheila Warren, CEO of the Crypto Council for Innovation. “This vision brings the U.S. closer to leading responsibly in digital finance rather than falling behind global peers.”

Even some institutional players, traditionally wary of crypto risk, acknowledged that Atkins’ vision could help unlock new product offerings and clearer compliance pathways.

A Shift Away from Enforcement-Heavy Policy

Atkins’ address also signaled frustration with what many see as the SEC’s overreliance on enforcement rather than rulemaking. High-profile cases in recent years have targeted everything from centralized exchanges to token issuers, often without clear guidance prior to legal action.

By promoting a principles-based approach, Atkins aims to reduce regulatory uncertainty and litigation, while still maintaining investor protections through transparency, fair disclosure, and market surveillance mechanisms.

What Comes Next

While Atkins’ speech represents a bold ideological pivot, it remains to be seen how much traction his proposals will gain within the Commission itself. Current SEC Chair Gary Gensler has previously maintained that many tokens are securities under existing law, though recent legal setbacks have challenged the agency’s position.

With new legislation advancing in Congress and growing bipartisan interest in modernizing digital asset policy, Atkins’ remarks may help catalyze a formal shift in how the SEC approaches crypto regulation.

If adopted, his framework could pave the way for a more stable and innovation-friendly environment in the U.S. crypto sector—potentially bringing millions of users and billions in capital back onshore.

As global competition intensifies, Atkins’ bold stance may represent not just a vision for reform—but a necessary recalibration to ensure the U.S. remains a leader in the digital financial era.