SEC's approach to tokens seeks to foster innovation in the crypto space while ensuring safeguards for investors

Bitget App

Trade smarter

Bitget

News

Markets

SEC's approach to tokens seeks to foster innovation in the crypto space while ensuring safeguards for investors

Bitget-RWA2025/11/13 05:17

By:Bitget-RWA

- SEC introduces flexible token classification framework under Project Crypto, using Howey Test to distinguish securities from commodities while allowing blockchain innovation. - Framework acknowledges decentralized networks may lose securities status as control disperses, creating dynamic regulatory boundaries for evolving crypto projects. - Plans include exemptions for certain tokens and collaboration with industry players like Tether to build infrastructure, aligning with CLARITY Act's regulatory clarit

The U.S. Securities and Exchange Commission (SEC) has introduced a new adaptable framework under its Project Crypto initiative to help define how crypto assets are regulated, aiming to provide clearer guidelines and support innovation while still protecting investors. On November 12, Chair Paul Atkins presented the "Token Classification Framework," which is based on the 1946 Howey Test—a legal benchmark used to decide if an asset is an investment contract and therefore a security, according to a report by

LookonChain

. The framework clarifies that not every cryptocurrency will be classified as a security, even if it initially fits the Howey Test, as highlighted in a

Coinotag report

Atkins pointed out that the framework recognizes how blockchain projects can change over time, explaining that tokens might no longer be considered securities as their networks become more decentralized and original issuers relinquish control, as outlined in a

Blockonomi analysis

. "Networks evolve. Code is deployed. Authority spreads out," he remarked, indicating a more nuanced regulatory perspective compared to the stricter enforcement approach of former Chair Gary Gensler, as reported by

Benzinga

. The SEC also intends to create exemptions for specific tokens, making it easier to raise capital while still upholding anti-fraud rules, as

Yahoo Finance

reported.

SEC's approach to tokens seeks to foster innovation in the crypto space while ensuring safeguards for investors image 0

This initiative is in line with broader legislative measures, such as the upcoming CLARITY Act, which aims to clearly define the roles of the SEC and the Commodity Futures Trading Commission (CFTC) regarding digital assets, as

CoinDesk

reported. Under this new system, leading cryptocurrencies like

Bitcoin

and

Ethereum

would likely be regulated by the CFTC as digital commodities, while "ancillary assets" with mixed features would stay under SEC oversight, according to

Yahoo Finance

. This strategy aims to resolve longstanding regulatory uncertainty, allowing tokenized securities and stablecoins to function within established market structures, as mentioned by

CryptoSlate

Industry experts, including the Wall Street firm Bernstein, have commended the U.S. regulatory direction as a driver for global leadership in crypto. The GENIUS Act, which helped stablecoins grow to over $260 billion in U.S. dollar-backed supply, along with the CLARITY Act, are viewed as key steps for institutional adoption, as

Yahoo Finance

noted. In addition, Franklin Templeton has expanded its Benji Platform to the Canton Network, a private blockchain for institutional clients, enabling instant trading of tokenized funds with greater privacy, as reported by

Coinotag

The SEC's plans also intersect with industry developments, such as

Tether

, KraneShares, and Bitfinex's alliance to build infrastructure for tokenized securities. These partnerships aim to bridge traditional finance and blockchain, targeting institutional investors in jurisdictions like El Salvador, as

Yahoo Finance

reported.

Atkins emphasized that the framework does not mean a reduction in enforcement, reaffirming that "fraud is fraud" and promising to address wrongdoing in digital asset markets. The SEC's Project Crypto approach seeks to balance innovation with regulation, positioning the U.S. as a potential frontrunner in global crypto oversight.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

PoolX: Earn new token airdrops

Lock your assets and earn 10%+ APR

Lock now!

- Trump's $TRUMP meme coin raises $148M via exclusive dinner, sparking political backlash and regulatory scrutiny over elected officials' crypto profits. - Canary Funds files first MOG Coin ETF, mirroring Bitcoin/Ethereum models, signaling institutional interest in meme coins despite speculative risks. - ZKP's $100M healthcare/finance infrastructure project leverages privacy-focused AI and hardware, contrasting with short-term volatility of XRP/Hyperliquid. - Hyperliquid's $4.9M stress test loss and unprov

Bitget-RWA•2025/11/13 06:15

Hyperliquid News Today: The Crypto Craze Versus Real Progress—Meme Tokens Face Off Against Privacy-Focused Infrastructure

Japan’s FSA Tightens Security on Crypto by Requiring Custodians to Register

- Japan's FSA mandates crypto exchanges to use registered custodians post-2024 DMM Bitcoin hack, requiring third-party providers to pre-register with regulators. - The rule addresses regulatory gaps exposing cold wallet vulnerabilities, as Tokyo-based Ginco's breach revealed unregulated external firms handling critical operations. - Parallel initiatives include JPYC stablecoin approval and a 2025 bank-led stablecoin payment pilot under the FSA's Payment Innovation Project. - The FSA plans 2026 legal reform

Bitget-RWA•2025/11/13 06:15

User Empowerment Fuels Valdora’s $10M TVL Growth in DeFi

- Valdora Finance, a ZIGChain liquid staking protocol, reached $10M TVL days post-launch, now tracked by DefiLlama. - Its non-custodial model enables ZIG token staking with liquidity retention via stZIG derivatives, aligning with DeFi sovereignty trends. - ZIGChain's strategic partnership with Valdora highlights its cross-chain ambitions and growing institutional confidence in its infrastructure. - Despite regulatory risks, the protocol's composability and scalability position ZIGChain as a rising DeFi hub

Bitget-RWA•2025/11/13 06:15

XRP News Today: BIS Risk Weighting Limits XRP's Function in Bank Liquidity

- XRP's limited adoption by banks stems from BIS's 1250% risk weight on unbacked crypto, not technical flaws. - Ripple tests RLUSD stablecoin with Mastercard/WebBank to enable blockchain-based credit card settlements. - Policy shift in crypto risk weighting is critical for XRP to replace USD as cross-border liquidity bridge. - RLUSD's $1B+ circulation and BNY Mellon backing demonstrate regulated stablecoin viability in payments. - Regulatory barriers persist despite industry progress, keeping XRP confined

Bitget-RWA•2025/11/13 05:58