Key Notes
- Framework introduces digital commodities, collectibles, tools, and tokenized securities as distinct asset categories.
- Sunset provision allows tokens to exit securities designation when networks achieve sufficient decentralization.
- Secondary trading exemptions enable post-contract assets to move to CFTC-regulated or state-supervised platforms.
SEC Chairman Paul Atkins proposed a token classification framework on Nov. 12 that outlines how digital assets can transition out of securities status once their underlying networks become decentralized.
The “Project Crypto” initiative introduces four distinct categories, according to Atkins’ remarks at the Philadelphia Federal Reserve conference:
- Digital commodities
- Digital collectibles
- Digital tools
- Tokenized securities
The framework establishes that while a token’s initial sale might constitute an investment contract, the asset itself does not remain a security in perpetuity. Under the proposed “sunset” provision, the investment contract designation would expire when a project demonstrates code deployment and sufficient decentralization.
Regulatory Harmonization and Trading Exemptions
The proposal supports exemptions that would permit secondary trading of post-contract assets on alternative trading venues. These assets could move to platforms regulated by the Commodity Futures Trading Commission (CFTC) or state authorities. This shift follows recent market expansions, such as the launch of CME Group Solana options for SOL SOL $153.7 24h volatility: 1.8% Market cap: $85.16 B Vol. 24h: $6.18 B products and other institutional derivatives.
For assets that remain within the securities definition, the Commission aims to streamline registration. Figure’s SEC-registered YLDS token , which deployed on the Sui blockchain in October, represents the type of “tokenized security” the new taxonomy aims to regulate clearly, as previously reported by Coinspeaker.
Industry Context and Development
The speech builds on the “Project Crypto” directive launched on July 31, according to the SEC’s initial announcement . The new framework aims to provide clarity in an area marked by previous SEC enforcement, which had effectively halted token sales for US retail investors since 2018. The recent launch of a new Coinbase token sales platform , the first of its kind to include US retail participation since that time, coincides with this regulatory push.
Commissioner Hester Peirce’s prior work also informed the proposal, specifically her “New Paradigm” remarks from May 19, according to official archives . Market participants have continued to file for regulated products amid this shifting landscape. Canary Capital Litecoin LTC $98.39 24h volatility: 0.9% Market cap: $7.53 B Vol. 24h: $976.77 M ETF filings recently cleared key listing steps, reflecting industry anticipation of a more defined regulatory environment for assets like Litecoin.
