SEC Chair Signals Shift: Many ICO Tokens May Fall Outside Securities Rules

SEC Chair: Most ICOs Are Likely Outside Securities Regulation

(Source: SECPaulSAtkins)

During a blockchain policy summit, Paul Atkins, Chair of the U.S. Securities and Exchange Commission (SEC), reaffirmed that many Initial Coin Offerings (ICOs) do not fall within the scope of SEC securities oversight. He stressed that when token transactions do not meet the definition of securities, the SEC will not intervene directly.

Atkins’ comments addressed market speculation about the potential resurgence of ICOs and highlighted his commitment to establishing a more transparent, innovation-driven framework for token classification.

Four Key Token Categories

In the token classification framework released last month, Atkins identified four major categories of crypto assets. He explained that three categories fundamentally lack securities attributes:

• Network Tokens
• Digital Collectibles
• Digital Tools

According to Atkins, if tokens issued via ICOs fall into any of these categories, the fundraising activity should not be considered a securities offering.

The only tokens subject to SEC oversight are tokenized securities—blockchain representations of traditional financial instruments.

Regulatory Responsibilities

Atkins noted that different ICO types have distinct characteristics, and not all ICOs are under the SEC’s jurisdiction. He clarified:

• The three non-security token categories → regulated by the Commodity Futures Trading Commission (CFTC)
• Only actual security tokens → regulated by the SEC

This shift means that a substantial portion of crypto fundraising (ICOs) may move out from under the SEC’s stringent framework, with the more flexible CFTC taking the lead. The market anticipates a significant reduction in regulatory constraints.

ICOs Poised for Mainstream Comeback

The 2017 ICO boom attracted global capital, but the SEC’s lawsuits against projects for unregistered securities offerings quickly cooled the market.

Atkins’ recent statements suggest that the ICO market could rebound under the new framework, potentially without waiting for Congress to enact crypto-specific legislation.

If most tokens are classified as non-securities, future issuances will be more viable and easier to bring into regulatory compliance.

Coinbase Rolls Out ICO Platform

While regulatory legislation is still pending, the industry is moving forward rapidly. Last month, Coinbase launched a new ICO issuance platform, built from its $375 million acquisition of Echo, giving U.S. users direct access to token issuance tools. This move signals the industry’s growing optimism for the mainstream return of ICOs.

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Conclusion

Atkins’ latest remarks provide clear direction for the U.S. token issuance market: if most ICOs are not considered securities, they could operate in a more permissive regulatory landscape. With the SEC and CFTC redefining their roles and industry participants preparing new ICO infrastructure, the U.S. market may be on the verge of a new era of decentralized fundraising.