Speaking on November 12, 2025, Atkins emphasized that the SEC’s priority is to bring clarity to token taxonomy, properly apply longstanding legal standards like the Howey Test, and ensure that innovators and investors can operate under rules that are predictable, transparent, and grounded in law.
Atkins argued that crypto regulation must avoid overreach and instead rely on principles that respect the limits of the SEC’s authority. His remarks included a direct warning against treating every blockchain innovation as inherently “suspect,” stressing that misusing securities laws could undermine both innovation and public trust.
“In a free society, the rules that govern economic life should be knowable, reasoned, and appropriately constrained,” Atkins said. “When we stretch the securities laws beyond their proper scope, when we treat every innovation as presumptively suspect, we stray from that core principle.”
I was honored to give the keynote at the @PhiladelphiaFed’s Ninth Annual Fintech Conference this morning. My remarks outlined the next steps in the @SECgov’s Project Crypto and what to expect in the coming months. pic.twitter.com/WI79ANJrfD
— Paul Atkins (@SECPaulSAtkins) November 12, 2025
He added that the SEC must recognize when investment-contract rules no longer apply, especially for decentralized networks that no longer rely on a central managerial body. According to Atkins, acknowledging these limits “honors the principle” that lawful innovation should stand on its own merits once it becomes sufficiently decentralized and independent.
The speech drew significant attention across the crypto industry, as it signals a potential shift toward clearer classifications and a more consistent regulatory framework, something developers and investors have long sought. Clarity on token categories and legal status could eventually reduce enforcement-by-surprise and help projects determine whether they fall under securities law or not.
What Is the Howey Test?
The Howey Test is a legal framework used by the U.S. Securities and Exchange Commission (SEC) to determine whether a transaction qualifies as an investment contract, and therefore a security. It originates from a 1946 U.S. Supreme Court case, SEC v. W.J. Howey Co., and remains one of the most important standards in crypto regulation.
Under the Howey Test, an asset is considered a security if all four of the following are true:
- There is an investment of money
- Into a common enterprise
- With a reasonable expectation of profit
- Based on the efforts of others
If all four conditions are met, the asset falls under securities regulation, meaning issuers must register, disclose information, and comply with investor-protection laws.
This is why the Howey Test is central to the SEC’s approach to crypto: it determines whether a token is treated like a security, a commodity, or something else entirely.
Atkins’ speech suggests the SEC intends to refine and clarify how the Howey Test applies to modern blockchain networks, especially those that evolve beyond centralized control.
