Reversing the Biden Administration's Policy:
"Most Virtual Assets Are Not Securities"
Chairman Atkins Vows to Bring Back Crypto Companies That Left the U.S.
Paul Atkins, Chairman of the U.S. Securities and Exchange Commission (SEC), stated on July 31 (local time), "Most virtual assets are not securities."
Chairman Atkins made this statement while announcing "Project Crypto," a new initiative to promote virtual currency policy, at the America First Policy Institute, a pro-Trump think tank in Washington, D.C., on the same day.
Regarding "Project Crypto," Chairman Atkins said, "This is a plan to modernize securities regulations so that the U.S. financial market can move on-chain," and added, "Contrary to what the SEC has previously stated, most virtual assets are not securities. We will establish guidelines to determine whether a virtual asset qualifies as a security, and we will draft proposals for broad disclosure and exemption regulations." "On-chain" refers to a system in which all financial transaction records are processed in real time on the blockchain.
With this, the SEC has completely reversed the policy of the previous Biden administration, which regulated by stating, "The majority of virtual assets are securities." Chairman Atkins pointed out that confusion over the application of the "Howey Test," the standard used by the SEC to determine whether something is a security, "has led innovators to treat all virtual assets as securities," and emphasized, "We will ensure that outdated rules do not hinder American entrepreneurship." However, he did not specify which types of coins would not be considered securities.
The question of whether virtual assets qualify as securities has been one of the major controversies in the market. Former SEC Chairman Gary Gensler regulated virtual assets on the grounds that they should be subject to securities laws, and the industry responded by filing lawsuits. In relation to this, litigation between the SEC and XRP (Ripple), the third-largest cryptocurrency by market capitalization, is still ongoing.
Previously, in July 2023, the New York District Court ruled that "XRP is subject to securities laws only when sold to institutional investors, and is not a security when sold to the general public." However, the lawsuit moved to a higher court due to the SEC's appeal, and it is now reported that, under President Trump's pro-cryptocurrency policy, both sides are close to reaching a settlement by withdrawing their appeals.
Chairman Atkins said, "Although Congress is still working to establish a legal definition for virtual assets, the SEC will provide clear guidelines so that market participants can determine for themselves whether something qualifies as a security or investment contract." He further emphasized his commitment to realizing the "golden age of digital assets" in the United States, as President Trump has highlighted, and stated, "We will bring back virtual asset companies that left the United States due to regulatory pressure from the previous administration."
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