SEC Chair Atkins Indicates Certain ICOs May Not Qualify as Securities
The post SEC Chair Atkins Indicates Certain ICOs May Not Qualify as Securities appeared on BitcoinEthereumNews.com.
SEC Chair Paul Atkins clarified that ICOs involving network tokens, digital collectibles, and digital tools are not considered securities, placing them outside SEC jurisdiction and under CFTC oversight. This encourages innovation in non-security token sales while focusing regulation on tokenized securities. Network tokens linked to decentralized blockchains avoid securities classification. Digital collectibles referencing memes, characters, or trends are exempt from SEC rules. Digital tools providing functions like tickets or memberships, with over 70% of 2017 ICOs now potentially unregulated under this taxonomy. Discover which ICOs are not securities according to SEC Chair Paul Atkins. Explore non-security token types and implications for crypto fundraising in 2025. Stay informed on regulatory shifts today. What Types of ICOs Are Not Considered Securities by the SEC? ICOs not considered securities include those for network tokens, digital collectibles, and digital tools, as outlined by SEC Chair Paul Atkins. These categories fall outside the SEC’s definition of securities, allowing them to proceed without registration under securities laws. Atkins emphasized encouraging such transactions to foster blockchain innovation, shifting oversight to the Commodity Futures Trading Commission (CFTC) for most crypto activities. How Does the SEC’s Token Taxonomy Classify Non-Security ICOs? The SEC’s token taxonomy, introduced by Chair Paul Atkins last month, divides tokens into four categories: network tokens, digital collectibles, digital tools, and tokenized securities. Network tokens support decentralized blockchain networks and enable peer-to-peer transactions without centralized control. Digital collectibles often tie to internet memes, characters, current events, or cultural trends, functioning more like unique digital assets than investment contracts. Digital tools offer practical utilities, such as access tickets, memberships, or software functionalities within blockchain ecosystems. According to Atkins’ framework, ICOs in these three areas do not meet the Howey Test criteria for securities, which requires an investment of money in a common enterprise with expectations of profits…
