SEC Chair Atkins: Tokenized securities regulation is being “reset,” signing an MOU with the CFTC

On April 21, Paul Atkins, Chair of the U.S. Securities and Exchange Commission (SEC), announced a “reset” plan for the digital-asset oversight of its “A-C-T” strategy (advance, clarify, transform) in a keynote address at the Economic Club of Washington, marking the one-year anniversary since he took office. The core elements include an “innovation exemption” mechanism, a five-category token classification framework, and a memorandum of understanding (MoU) signed with the U.S. Commodity Futures Trading Commission (CFTC).

Five-category token framework: Narrowing the SEC’s jurisdiction

(Source: SEC)

According to Atkins’ speech, the SEC’s five-category token framework explicitly places four of the five token types outside the scope of securities laws, leaving only a small portion of crypto assets subject to regulation under existing securities laws—thereby narrowing the SEC’s direct jurisdiction. In his speech, Atkins said, “Our goal is to help market participants categorize crypto assets clearly, rather than making them guess after the fact whether the SEC will determine that certain assets are securities.”

Atkins also emphasized the principle of “form not changing the substance,” noting that whether stocks exist in traditional paper form, are registered through the DTCC, or take the form of blockchain tokens, their nature remains that of stocks, but not all tokens used for financing should be viewed as securities forever.

Innovation exemption: 12 to 36 months of relief

Based on Atkins’ speech and the SEC’s prior guidance in “Project Crypto,” the “innovation exemption” allows eligible issuers and trading venues, during a 12- to 36-month relief period, to issue and trade tokenized securities on-chain under comparatively more lenient regulatory conditions, without having to comply with all immediate registration requirements. After the relief period ends, the relevant parties must demonstrate that they have achieved “sufficient decentralization,” or transition to a standard securities regulatory regime.

Atkins said this exemption is intended to keep the tokenization of stocks, bonds, and other real-world assets within the U.S. market, and he said the new roadmap is meant to “restore regulatory clarity, strengthen competitiveness, and accelerate innovation.”

SEC and CFTC memorandum of understanding

According to the SEC’s public statement, the SEC has signed an MoU with the CFTC, committing to jointly interpret crypto assets, coordinate rulemaking, and establish a regulatory framework tailored to the needs of on-chain markets. The expansion work of Project Crypto also focuses in parallel on modernizing on-chain clearing, margin, and collateral rules, with the goal of formally bringing the tokenized market within an expanded regulatory framework of U.S. capital markets.

Frequently asked questions

What are the key terms of the SEC’s “innovation exemption”?

According to the SEC Chair Atkins’ speech and the Project Crypto guidance, the “innovation exemption” allows eligible issuers and trading venues to trade tokenized securities on-chain on more lenient terms during a 12- to 36-month relief period. After the relief period, they must demonstrate “sufficient decentralization” or transition to a standard securities regulatory regime.

How does the SEC’s five-category token framework affect the scope of crypto-asset regulation?

According to Atkins’ speech, the five-category token framework places four of the five token types outside the scope of securities law regulation, leaving only a small portion of crypto assets regulated under existing securities laws. The aim is to provide clear categorization for market participants, rather than relying on after-the-fact enforcement determinations.

What core issues are covered in the SEC-CFTC memorandum of understanding?

According to the SEC’s public statement, the SEC and CFTC’s memorandum of understanding commits them to jointly interpret crypto assets, coordinate rulemaking, and establish a regulatory framework suited to the needs of on-chain tools, covering the modernization of clearing, margin, and collateral rules.