Now that the US Securities and Exchange Commission (SEC) has placed most digital assets, including cryptocurrencies, outside its oversight, chair Paul Atkins said the “brake on innovation” that the market watchdog had become under Gary Gensler is disappearing.
At the Digital Asset Summit in New York last week, Atkins said the SEC has “definitively” delineated the boundaries of its authority. He also stated that the US regulator is no longer the “Securities and Everything Commission.”
With that remark, he distances himself from the approach of Gary Gensler, under whose leadership the SEC sought to bring a large part of the crypto market under securities law. In recent years, the regulator initiated more than 100 enforcement actions against crypto companies, including Coinbase, Kraken, and Binance.
The new policy line, developed together with the Commodity Futures Trading Commission (CFTC), shifts the center of gravity of oversight. Large parts of the market no longer fall under the SEC, but under other regulators, primarily the CFTC. This answers a long-standing question in the sector: when is a digital asset a security?
The classification used by the regulators distinguishes five categories of digital assets: digital commodities, digital collectibles, digital utilities, stablecoins, and digital securities. Only the last category, tokenized versions of stocks or bonds, remains under SEC oversight.
Cryptocurrencies such as bitcoin, ether, solana, and XRP are classified as digital commodities. NFT collections fall under digital collectibles. Staking and mining, processes in which transactions are validated and new tokens are created, are also placed outside the scope of securities law.
The core of the new approach lies in a legal distinction between the asset and the transaction. “The token is not the security; the contract and the associated promises to investors are what matter,” Atkins said.
In practice, this means that raising capital via crypto can fall under securities law, while the tokens themselves do not necessarily remain so. Once a project becomes operational or the original promise fades, trading in those tokens can take place outside the SEC’s scope.
Atkins made clear that this interpretation is a deliberate correction of what he sees as mismanagement by his predecessor Gary Gensler, who led the SEC during President Biden’s term. At the crypto event, Atkins said the new policy “returns the SEC to its core task and statutory authority.” According to him, the market watchdog had become “a brake on innovation.”
Manipulation and political pressure
The SEC’s decision to limit its oversight of crypto comes at a time when the sector is once again under scrutiny, partly due to market manipulation and its growing entanglement with politics.
Shortly before his inauguration in January 2025, Donald Trump launched the $TRUMP memecoin. Its value quickly rose to more than 27 billion dollar, only to largely evaporate afterward. Only a limited portion of the tokens traded freely; the majority remained in the hands of entities around the Trump Organization. Shortly thereafter came the launch of the $MELANIA token, which showed a similar price pattern: a rapid rise followed by a sharp decline.
The role of crypto in the revenues of the Trump Organization has since become significant. According to Reuters, in 2025 more than 90 percent of revenue came from digital assets, partly from foreign buyers. In a separate case, the SEC temporarily halted a fraud investigation into entrepreneur Justin Sun shortly after he invested in a project linked to the Trump family.
In Washington, this is raising questions about conflicts of interest. Senator Jeff Merkley said it has become possible to buy political influence through crypto assets. Proposals to limit such arrangements have not yet been adopted. Senator Elizabeth Warren stated that under Atkins, the SEC “has eroded investor protection and reduced enforcement to the lowest level in years,” precisely at a time when the market is least able to withstand it.
Warren referred to analyses by external parties showing that the number of SEC enforcement actions against publicly listed companies fell by about 30 percent in fiscal year 2025. Her request for clarification follows a hearing in February, in which Paul Atkins disputed these numbers but did not provide official data from the regulator.
“I don’t know where you are getting these figures, so I cannot agree with them,” Atkins said at the time in response to questions about a possible decline in enforcement capacity. The SEC typically publishes its annual enforcement data at the end of the calendar year, but the report for 2025 has not yet been released.