- Atkins says most ICOs fit non-security categories under the SEC’s new token model.
- Network tokens and collectible ICOs may shift oversight from the SEC to the CFTC.
- A new ICO framework may reopen U.S. fundraising while reducing compliance pressure.
A major shift in U.S. digital-asset oversight appears to be underway after SEC Chair Paul S. Atkins stated that most initial coin offerings, or ICOs, do not fall within the commission’s authority. His remarks signal a break from years of stricter interpretations and could reshape how developers raise capital inside the country.
A New Token Framework Redraws ICO Boundaries
At the Blockchain Association’s annual policy summit, Atkins explained a token framework the agency rolled out in recent weeks. It places crypto assets into four broad categories: network tokens, digital collectibles, digital tools, and tokenized securities. Only the last group, he said, falls within the SEC’s domain.
SEC Chair Paul Atkins Declares Most ICOs Outside Agency Jurisdiction (Source: X)
Atkins made it clear that ICOs linked to network tokens, digital collectibles, or digital tools should not be treated as securities offerings. He described such activity as “non-security transactions,” meaning the SEC would not police them under traditional securities rules. These models could instead fall under the Commodity Futures Trading Commission’s authority, or in some cases, may not require direct federal supervision at all.
The distinction marks a meaningful change. For years, the question of when an ICO qualified as a securities offering shaped enforcement activity and forced many projects to avoid U.S. participants. By drawing lines between these token types, the agency is attempting to clarify when an ICO truly resembles an investment contract and when it does not.
A Window for ICO Fundraising in the U.S.
If this interpretation is adopted into formal policy, the U.S. ICO market may reopen in ways not seen since the industry’s early surge. For developers, the risk of having an ICO permanently labeled a securities offering has often discouraged domestic fundraising. As a result, many teams chose offshore jurisdictions with more predictable treatment.
However, under Atkins’ view, an ICO tied to a network token, digital collectible, or digital tool could proceed without the heavy reporting and registration obligations that accompany a securities offering. That shift could lower legal costs, preserve early development budgets, and allow teams to raise capital from U.S. participants without fear of triggering immediate enforcement actions.
Legal analysts at Winston & Strawn and A&O Shearman noted that the remarks resemble early efforts to build a dedicated rulebook for token activity. The SEC’s ongoing initiative, called Project Crypto, aims to create standards for token issuance, custody, and trading instead of squeezing every token sale into long-standing securities models.
Regulatory Coordination and Policy Uncertainty
The SEC and CFTC have already committed to closer coordination. Earlier this year, both agencies issued a joint statement pledging to align product definitions, reporting expectations, and oversight of trading platforms. That cooperation will matter because many token models sit between the boundaries of commodities and securities regimes.
Still, key questions remain unresolved. The SEC has not adopted formal rules confirming Atkins’ taxonomy, and the drafting process could surface disagreement inside the commission. One recurring challenge involves determining when an ICO begins as an investment contract but later becomes a commodity-like asset once a network is launched.
Investor advocates cautioned that reduced oversight for non-securities ICO models may revive familiar risks. Fraud, misleading disclosures, and aggressive marketing shaped earlier waves of token fundraising. While regulators will still pursue misconduct under anti-fraud statutes, the absence of mandatory registration or structured disclosure requirements could leave gaps in investor awareness.
A Pivotal Moment for U.S. Crypto Policy
Atkins’ comments arrive at a moment when Congress remains stalled on broader digital-asset legislation. Rather than wait for statutory reforms, regulators appear ready to move ahead with their own rulemaking. For developers deciding where to build, the classification of most ICOs as non-securities may influence whether they remain in the U.S. or shift operations abroad.
For investors, the environment could resemble earlier ICO cycles but with clearer regulator-to-regulator coordination. If the SEC finalizes this approach, the U.S. could see the return of ICO fundraising under a framework that reflects how today’s token markets operate.
For now, the chair’s remarks signal a possible turning point: an attempt to match regulatory treatment with the economic reality of each token category, rather than fold every offering into the securities rulebook.
