Amid the wave of digital assets sweeping through the global financial system, the U.S. Securities and Exchange Commission (SEC) has long been regarded as the most controversial and influential regulatory force in the crypto world. The uncertainty of its stance, strict interpretation of the definition of "security," and frequent enforcement actions have made it difficult for innovators and investors to navigate through the fog.

However, a fundamental shift is occurring. In a speech titled "Project Crypto" on November 12, 2025, SEC Chairman Paul S. Atkins not only directly addressed the market's craving for regulatory certainty but also proposed a new regulatory paradigm based on "economic substance" rather than "technical labels." The core of this shift lies in no longer viewing every technological innovation as suspicious but acknowledging that the lifecycle of an investment contract may terminate, thereby clearing the final institutional hurdle for tokens' compliance path.

I. Clarifying Regulation to Address Uncertainty: Ending the "Decade of Fog"

Over the past decade, the most frequently asked question in the crypto market has been: "Is this token a security?" However, this question reflects the systemic confusion caused by regulatory ambiguity. In his speech, Atkins admitted that "crypto asset" is not a statutory term under securities laws but a technical description. The key issue lies not in the technical form but in the "legal rights" and "economic substance" it carries.

For a long time, market participants have been trapped in a rigid cognitive misconception: once a token is identified as part of an "investment contract," it is permanently labeled a "security," and every subsequent transaction must comply with securities regulations. This view of "once a security, always a security" not only lacks legal basis but is also severely disconnected from the practical development of digital assets. Atkins explicitly stated that this view is "unsustainable, unworkable, costly, and yields minimal benefits," directly leading to innovation flowing out to jurisdictions with clearer regulations.

To this end, the SEC will reshape its regulatory framework with "clear boundaries" and "understandable language" to address the market's fundamental need for certainty. This statement marks the SEC's shift from "enforcement-led" to "rule-led," and from "post-facto accountability" to "ex-ante guidance."

II. Focusing on Substance Over Token Form: Economic Reality Trumps Technical Labels

In constructing the new regulatory framework, Atkins emphasized two core principles: First, the nature of a security does not change based on its form of载体. Second, economic reality trumps all labels.

This means that regardless of whether an asset exists as a paper certificate, database record, or blockchain token, as long as its essence represents a claim on enterprise profits and relies on the managerial efforts of others, it falls under the jurisdiction of securities laws. Conversely, even if a token was initially issued as part of an investment contract, once the contract is fulfilled or terminated, its subsequent transactions should no longer be considered securities transactions.

This stance returns to the "substance over form" principle established by the U.S. Supreme Court in the Howey case, abandoning excessive fixation on technical appearances and instead focusing on the asset's actual role in economic activities.

III. Classifying Tokens Based on Different Needs: Building a Unified Token Map

To implement the above principles, Atkins proposed a preliminary token classification system, categorizing crypto assets into four types:

Digital Commodities/Network Tokens: Such as native tokens in decentralized networks like Bitcoin, whose value derives from the system's programmed operation itself, not reliance on others' managerial efforts. They are not securities.

Digital Collectibles: Assets like NFTs representing content such as art, music, or in-game items, whose value lies in use or collection, not investment for profit. They are not securities.

Digital Utility Tokens: Tokens with practical functions, such as membership credentials, tickets, or identity badges. They are not securities.

Tokenized Securities: Tokens representing traditional financial instruments like stocks or bonds. Regardless of form, they remain securities.

This classification not only addresses the market's urgent need to know "which tokens are not securities" but also provides clear guidance for subsequent regulation and compliance paths.

IV. Segmenting the Process Based on Investment Contract Fulfillment: Acknowledging Contracts Can Terminate

Regarding the application of the Howey test, Atkins proposed a landmark view: Investment contracts can be fulfilled, expire, or be terminated. They are not permanent legal labels.

He used the historical变迁 of the Howey orange groves as a metaphor: the land that was once the subject of investment contracts is now golf courses and residential areas, no longer possessing the attributes of a security. Similarly, a token in its early project stages might rely on the "essential managerial efforts" of the development team. But as the network matures, code is released, and control decentralizes, the issuer's role diminishes or even disappears. At this point, the investment contract's lifecycle has ended, and token transactions no longer constitute securities transactions.

This concept of "contracts can terminate" breaks the long-standing rigid understanding of token "origins," providing a compliance exit for many mature public chain tokens and utility tokens.

V. Opposing Fraud Based on Commitment to Accountability: Enforcement Does Not Relax Due to Classification

Although the SEC shows openness in classification and exemptions, Atkins also clearly emphasized: The baseline against fraud will not change based on asset class. Whether securities or commodities, behaviors like misrepresentation, market manipulation, and absconding with funds will be severely punished.

He specifically noted that even if a token is not a security, if its sale involves false promises, the SEC can still pursue accountability under anti-fraud provisions. Simultaneously, the CFTC also has anti-fraud and anti-manipulation authority over commodity-like crypto assets.

This illustrates that regulatory flexibility does not equal leniency. Compliance boundaries can be widened, but the bottom line of the law cannot be challenged.

VI. Simplifying Processes for Innovation and Value: Creating Space for Experimentation and Growth

In the final part of his speech, Atkins called for the SEC to introduce a package of exemption measures, creating a "tailored issuance mechanism" for crypto assets. This mechanism aims to simplify compliance processes, lower innovation barriers, and allow project teams to focus on product development and user interaction rather than struggling with regulatory uncertainty.

He emphasized that the goal of regulation should not be to "shackle the future" but to "serve the people" — including entrepreneurs building solutions, workers investing for the future, and ordinary Americans sharing in the nation's prosperity.

This speech by the SEC Chairman is not only a systematic response to the past decade's crypto regulatory challenges but also a solemn commitment to America's future leadership in financial innovation. It signifies regulators shifting from "defensive enforcement" to "constructive guidance," from "techno-fear" to "economic rationality."

"We must never let fear of the future shackle us, leaving us trapped in the past." This statement might be the best footnote for the new era of U.S. crypto regulation. When regulators begin to acknowledge that investment contracts can terminate, when tokens are no longer perpetually questioned due to their "origin," when innovators no longer need to anxiety over vague rules — what we see is not just the removal of a regulatory obstacle but the dawn of a new era: code can grow for innovation, protocols can operate based on community needs, and the law will ultimately escort rather than obstruct.