Ethereum Updates: SEC Guidelines Allow Cryptocurrencies to Achieve Commodity Classification

SEC Chair Paul Atkins has introduced a comprehensive set of regulations for digital currencies that could transform the U.S. crypto sector, excluding leading tokens such as

(ETH), (SOL), and from being classified as securities, while still prioritizing investor safety and technological progress. This policy, revealed at the Federal Reserve Bank of Philadelphia’s Fintech Conference on November 12, 2025, represents a significant shift from the previous administration’s strict enforcement approach led by former Chair Gary Gensler. By utilizing the Howey Test—a legal benchmark for identifying investment contracts—to assess whether assets are securities, Atkins seeks to provide greater certainty for industry players and encourage a more stable environment for blockchain innovation .

Atkins’ guidelines divide crypto assets into four main categories: securities, commodities, collectibles, and utilities. Tokens that support decentralized networks will typically not be considered securities once their ecosystems are sufficiently developed, as users interact with them for their practical use rather than to gain profits from centralized control

. This includes widely used assets like , , and XRP, which function in decentralized systems where the original issuer’s influence fades over time . Likewise, “digital collectibles” such as NFTs that represent digital art or memes, and “digital tools” that provide access to services or membership benefits, are also not subject to securities regulation .

The foundation of this framework is the Howey Test, which determines if an asset involves a monetary investment in a shared venture with profits coming from the work of others. Atkins explained that tokens are only deemed securities if there are clear, direct promises of profit linked to managerial actions. As networks become more decentralized and tokens shift from investment contracts to functional assets, they may be freely traded as commodities

. This flexible model enables tokens to move from being classified as securities to non-securities, easing regulatory demands over time while still protecting against fraud .

To further encourage innovation, Atkins has proposed the concept of “super apps”—unregulated platforms where both securities and non-securities can be traded together. He directed staff to suggest ways these platforms could enable trading without requiring every asset to comply with SEC regulations. “The SEC should oversee capital raising, but we must not hinder innovation by limiting where assets can be exchanged,” Atkins said, stressing the importance of preventing fragmented regulations .

The framework also introduces a six-month transition period for issuers to resolve compliance issues, aiming to decrease enforcement actions and promote timely adjustments as networks develop

. However, tokens that are marketed with specific promises of profit will still fall under securities laws, highlighting the SEC’s ongoing focus on combating fraud.

Experts have welcomed this policy shift as a possible driver for institutional participation, with Chainalysis reporting that over 80% of major digital assets now operate in decentralized networks

. The new rules also support broader U.S. policy objectives, echoing findings from the President’s Working Group on Financial Markets that regulatory uncertainty has slowed domestic crypto growth, resulting in $2.5 trillion in market value being created overseas .

Atkins’ comments reflect a wider philosophical perspective: the SEC’s original mission, established during the Great Depression, was never meant to cover all digital assets. “Securities laws were crafted to address issues involving reliance on others’ expertise,” he noted. “They were not intended to govern every new type of digital value”

.