SEC Chair Paul Atkins Outlines Token Taxonomy Plan for Crypto Classification
SEC Chair Paul Atkins proposes a structured token taxonomy, grounded in the Howey Test, to distinguish securities from commodities and promote nuanced crypto regulation while complementing legislative initiatives.
SEC Chair Paul Atkins detailed plans for a 'token taxonomy' framework to differentiate crypto assets as securities or commodities, rooted in the Howey Test and legal principles. His approach stresses contextual analysis, noting that tokens tied to investment contracts do not permanently retain security status. Atkins praised Commissioner Hester Peirce's contributions and criticized blanket classification of all tokens as securities. The plan aims to provide clarity for developers, exchanges, custodians, and investors, complement ongoing congressional legislation, and ensure robust fraud enforcement while fostering innovation.
- Token Taxonomy: A classification framework for categorizing different types of cryptocurrency tokens based on legal and functional criteria.
- Howey Test: A U.S. legal test to determine whether a transaction qualifies as an investment contract subject to securities laws.