In a significant move for the cryptocurrency landscape, SEC Chair Paul Atkins announced that many types of initial coin offerings (ICOs) would not be classified as securities under the agency”s jurisdiction. Speaking at the Blockchain Association”s annual policy summit, Atkins clarified the agency”s position in response to a question from Decrypt.
Atkins emphasized that ICOs linked to network tokens, digital collectibles, or practical digital tools should not fall under the SEC”s definition of a security. This perspective aligns with his recent token taxonomy, which categorizes cryptocurrencies into four distinct types. He maintained that only tokenized securities, which represent traditional securities traded on-chain, would warrant SEC oversight.
“That”s what we want to encourage,” Atkins stated, indicating a shift that could foster a resurgence in ICO fundraising within the United States. The renewed stance comes in the context of a regulatory environment that has previously stifled such fundraising mechanisms, particularly after the SEC”s crackdown on unregistered securities during the 2017 crypto boom.
Atkins articulated that three categories—network tokens, digital collectibles, and digital tools—would be regulated primarily by the Commodity Futures Trading Commission (CFTC). This suggests that many ICOs might soon transition to a regulatory framework that is less stringent, potentially rejuvenating the market for token sales.
The implications of Atkins” comments are vast, offering a clearer pathway for companies seeking to raise capital through ICOs. Tokens associated with decentralized blockchain networks, those referencing trending internet phenomena, and those providing utility functions like tickets or memberships could soon be deemed viable for ICOs.
In a previous statement, Atkins referenced the SEC”s “Project Crypto,” which aims to facilitate ICOs through agency exemptions and safe harbors. While the pending Senate crypto market structure bill may also aim to streamline ICO processes, companies are already advancing with their plans, as seen with Coinbase”s recent launch of a platform for ICOs following its acquisition of the crypto fundraising platform Echo.
Overall, Atkins” remarks signal a pivotal moment for the crypto sector in the U.S., indicating a potential easing of regulatory burdens that have previously constrained innovation and fundraising opportunities.
