SEC Outlines Tokens Taxonomy to Exempt Commodities and Collectibles

Regulatory Framework

On 15 November 2025, SEC Chairman Paul Atkins detailed an updated regulatory approach under Project Crypto. The initiative establishes clear categories for digital assets, distinguishing between securities, commodities, and collectibles based on token function and purchaser expectations.

Token Taxonomy

Digital commodities, defined as network tokens carrying economic interest in open protocols, are classified outside securities regulation. Collectibles (NFTs) and utility tokens, serving membership, credential, or access purposes, are similarly exempt from SEC oversight.

Howey Test Application

The framework emphasizes the Howey test to identify investment contracts. Tokens linked to active managerial efforts qualify as securities until those efforts conclude. Once promises fulfill or terminate, tokens may trade freely without reclassification.

Coordination with Agencies

Project Crypto outlines collaboration with CFTC, banking regulators, and Congress to harmonize digital asset rules. Proposed exemptions and tailored offerings aim to foster innovation while preserving investor protections.

Enforcement Provisions

Anti-fraud provisions remain in effect for all token categories. Enforcement actions will target misrepresentations and manipulative practices, ensuring market integrity regardless of regulatory classification.

Industry Impact

Clear token definitions reduce legal uncertainty for developers and intermediaries. Dedicated guidance for digital collectibles and commodities supports ecosystem growth by delineating compliance obligations.

Next Steps

SEC plans to solicit industry feedback on proposed taxonomy. Draft rules are expected in Q1 2026, followed by public comment and final rule adoption. Coordination with legislative bodies may yield statutory refinements.

Conclusion

Project Crypto’s token taxonomy represents a pivotal shift toward functional regulation. Defined categories for digital assets aim to balance market integrity with technological innovation, charting a path for sustainable growth.