SEC Reveals Token Taxonomy Plan After Government Reopens
- Trump signs the order to end the US Shutdown and clears the path for new crypto rules.
- SEC launches a token taxonomy plan that regulates digital assets and future oversight.
- Washington resumes full operations as the agency embarks on shaping new crypto guidance.
The U.S. government reopened after the longest shutdown in its history, and the Securities and Exchange Commission moved quickly. Chair Paul Atkins introduced a “token taxonomy” plan built on the Howey Test to reshape digital-asset regulation. He announced the initiative during the Federal Reserve Bank of Philadelphia’s Fintech Conference, noting that the classification of crypto assets must reflect economic reality as networks evolve.
A Shift Toward a Defined Digital-Asset Framework
Atkins explained that the taxonomy will follow the Howey investment-contract analysis established by the U.S. Supreme Court in 1946. He noted that cryptocurrencies can form part of an investment contract at issuance, yet they may not remain securities indefinitely as networks progress.
He stated that networks grow, code launches, and control spreads across participants, which reduces reliance on the original issuer. He added that many tokens trade without expectations that a central team will remain in command.
The long-standing interpretation is that a token linked to an investment contract must permanently stay classified as a security. This was rejected, and he said that investment contracts can end when decentralization becomes effective and network reliance no longer exists. He also announced “Project Crypto,” describing it as a framework grounded in fairness, common sense, and economic reality.
Atkins said the taxonomy will separate digital commodities, collectibles, tools, and tokenized securities. It marked the SEC’s first attempt to categorize distinct segments of the crypto ecosystem. He clarified that tokenized securities, including stocks represented as blockchain tokens, will remain under SEC authority. He also made clear that enforcement will continue, stating, “Fraud is fraud.”
Regulatory Boundaries and New Trading Possibilities
Atkins addressed jurisdictional limits and explained that the SEC will maintain oversight of tokenized securities while other assets may be eligible for trading on non-SEC platforms. Directions are provided to Commission staff to propose pathways for tokens tied to investment contracts to trade under CFTC rules or within state-regulated frameworks.
He noted that exemptions would enter discussions, as the SEC may consider a tailored offering regime for crypto assets linked to investment contracts. This would shape a route for compliant offerings as legislation advances in Congress.
He also referenced earlier comments about “super-apps” that could handle trading and custody under one regulatory license. He confirmed he asked staff to continue developing that concept. Atkins said that aligning regulation with long-established legal standards supports consistency as crypto markets expand. Yet he also remarked that networks must meet defined conditions before transitioning away from securities treatment.
Related: What is the Howey Test? How Does it Affect Cryptocurrency?
A Critical Moment for Market Sentiment
The end of the U.S. government shutdown revived the regulatory process, giving agencies room to advance digital-asset policies. The reopening allowed the SEC to move ahead with its agenda at a time when markets sought stability following a period of post-crash volatility.
The proposed framework signals an important shift for functional and decentralized networks. Tokens no longer dependent on issuer involvement may eventually exit securities rules, opening doors to innovation and new trading structures. Still, the plan remains in its initial phase, and further action requires congressional legislation and full commission approval.
