SEC Chairman: Only tokenized securities are subject to securities laws

U.S. Securities and Exchange Commission (SEC) Chairman Paul Atkins outlined the criteria for applying securities laws to cryptocurrencies at the DC Blockchain Summit in Washington. 1. Payment stablecoins under the proposed Digital Commodities, Digital Collectibles, Digital Tools, and Stablecoin Regulation Act (GENIUS), as well as digital commodities, collectibles, and tools, are not considered securities. Only digital securities, defined as tokenized securities, are subject to securities laws. 2. Project teams must clearly disclose the termination point of an investment contract. An asset that is not a security could still be subject to securities laws if it is sold as part of an investment contract. 3. The SEC is currently considering a Safe Harbor provision for startups, fundraising, and investment contracts. A Safe Harbor is a type of exemption that suspends or mitigates legal sanctions or regulatory application if specific conditions are met. Previously, the SEC issued interpretive guidance classifying Bitcoin and Ethereum as digital commodities, not securities. According to the guidance, most cryptocurrencies, including BTC, ETH, XRP, SOL, and DOGE, are classified as digital commodities. Additionally, NFTs and memecoins are considered digital collectibles linked to music or art, placing them outside the scope of these regulations.