Detailed explanation of the SEC Chair's classification of crypto assets: NFTs, network tokens, and digital tools are not securities

BlockBeats News, November 13 — The Chairman of the U.S. Securities and Exchange Commission (SEC), Paul Atkins, today elaborated on his plan for a “Token Classification Law” to clearly distinguish which cryptocurrencies are considered securities. In the SEC’s press release, Paul Atkins shared his current views on various types of crypto assets, summarized as follows: Atkins emphasizes that tokenized products are considered securities, while non-tokenized NFTs, network tokens (ETH, SOL), and “digital tools” with practical functions (such as identity verification) are not securities. His detailed perspectives are as follows: “Digital commodities” or “network tokens” are not securities. Their value is inherently related to the programmed operation of decentralized, fully functional crypto systems, and they are generated from this process rather than from the expectation of profits derived from others’ key managerial work; “Digital collectibles” are not securities. These assets are intended for collection and/or use, and may represent or grant holders rights to digital expressions or references of artworks, music, videos, trading cards, in-game items, or internet memes, characters, current events, or trends. Buyers of digital collectibles do not expect to profit from the daily management work of others; “Digital tools” are not securities. These crypto assets have practical functions, such as memberships, tickets, vouchers, proof of ownership, or identity badges. Buyers of digital tools do not expect to profit from others’ daily management work. “Tokenized securities” are and will continue to be securities. These crypto assets represent ownership of financial instruments listed under the definition of securities, maintained on a crypto network. Paul Atkins stated that this list is not exhaustive and will be further refined.