TechFlow, November 13 — According to The Block, SEC Chairman Paul Atkins unveiled plans to create a "token taxonomy" during the Federal Reserve Bank of Philadelphia's fintech conference, aiming to clarify which cryptocurrencies qualify as securities. The preliminary classification includes: network tokens, NFTs, and digital utility tokens are not securities, while tokenized stocks and bonds are considered securities.
Atkins stated that the taxonomy will be based on the Howey Test (a 1946 U.S. Supreme Court case used to determine whether an asset constitutes an investment contract). He noted that while cryptocurrencies may initially form part of an investment contract, this status is not permanent. As networks mature, code is released, control becomes decentralized, and the role of the issuer diminishes, the nature of the token can change.
