SEC Chair Paul Atkins has introduced an “innovation exemption” that would let qualified firms issue and trade tokenized securities on-chain under tailored conditions while remaining under SEC oversight. He presented the move as a way to keep the tokenization of stocks, bonds, and other real-world assets inside U.S. markets instead of pushing experimentation offshore.
The announcement came during a keynote at the Washington Economic Club marking the first anniversary of Atkins’s chairmanship. He framed the broader regulatory reset around an “A–C–T” strategy — advance, clarify, transform — with asset classification placed at the center of the SEC’s digital-asset agenda.
Five-bucket framework narrows what counts as a security
Atkins said a new five-category token framework would place only a narrow slice of crypto assets within securities law, while explicitly treating most of the other categories as non-securities. That would narrow the SEC’s direct reach and shift the emphasis away from after-the-fact enforcement toward clearer upfront classification.
He repeated his view that “form does not change substance,” arguing that a stock remains a stock whether it exists on paper, as a DTCC book entry, or as a blockchain token. At the same time, he said not every token used in a capital raise should be treated as a security forever.
Exemption offers a 12- to 36-month grace period
The center of the reform is the innovation exemption. Based on earlier Project Crypto guidance, eligible issuers and trading venues would receive a 12- to 36-month grace window from full registration requirements. Once that period ends, they would need to show “sufficient decentralization” or move into the standard securities regime.
Atkins described the measure as a structured transition rather than a blanket carveout. It would allow on-chain securities activity to operate under defined limits in the U.S. while preserving the SEC’s supervisory role.
SEC and CFTC formalize coordination as Project Crypto expands
The SEC also signed a memorandum of understanding with the Commodity Futures Trading Commission. The agreement commits both agencies to joint interpretations, harmonized rulemakings, and a fit-for-purpose framework for crypto assets. In parallel, Project Crypto is being expanded to update clearing, margin, and collateral rules for on-chain instruments.
Taken together, the measures show a push to treat tokenized markets as part of U.S. capital markets rather than as a separate system handled mainly through enforcement. In separate remarks on the digital finance agenda, Atkins said the SEC’s earlier “head-in-the-sand” posture and “shoot-first, ask-questions-later” approach are over, and said the new roadmap is intended to restore regulatory clarity, strengthen competitiveness, and accelerate innovation.