The U.S. Securities and Exchange Commission has outlined a clearer framework for classifying digital assets, aiming to define when tokens fall under federal securities laws.
SEC Chair Paul Atkins said the approach refines the application of the Howey test and separates tokens into five categories, with four not classified as securities.
“Our framework clarifies the contours of an investment contract and distinguishes between five categories of digital assets, four of which are not securities,”
Atkins said.
The framework focuses on the economic reality of transactions, assessing whether investors expect profits from the efforts of others within a common enterprise.
It also introduces clearer guidance on when token fundraising activities may trigger securities law requirements, helping developers navigate compliance during capital raising.
The initiative reflects coordination with the Commodity Futures Trading Commission and signals a shift toward more structured and limited regulatory oversight.
However, the SEC noted the framework is not a complete solution, with further clarity dependent on future legislation from Congress.