SEC “Token Classification Law” In-Depth Analysis: Four New Digital-Asset Categories — How Will They Reshape the Future of the Crypto Industry?

SuperEx_Media ✔️ · 2025-11-14T09:17:10Z

#SEC #okenClassification #Crypto Industry?

On November 12, at the Federal Reserve Bank of Philadelphia’s fintech conference, U.S. Securities and Exchange Commission (SEC) Chair Paul Atkins opened with a very straightforward and quite amusing remark: “If you’re already tired of hearing the question ‘Are crypto-assets securities?’ I completely understand.”

What does this mean? Very simple: starting today, you no longer need to be troubled by the question of whether crypto-assets are securities. Indeed, at this conference he officially announced that the SEC will establish a four-category token classification system based on the Howey Test. This is not only the clearest and most systematic statement of position by a U.S. regulator in the crypto-asset arena, but also the first time in a decade that the entire crypto market has seen a clear, systematic, and implementable regulatory model.

This is not an ordinary “policy update.”
This is a fundamental restructuring of the standards that define the essence of crypto-assets.
This is the critical moment that ends the regulatory gray zone and lays the foundation for compliant digital assets over the next decade.

Why is the industry so shaken? Because for the past ten years, the crypto market has been stuck on an unanswerable question: “Exactly what counts as a security?” This question has trapped American entrepreneurs, trapped institutional capital, and trapped the construction of the tokenized world’s infrastructure.

The SEC’s latest stance provides a clear path for the first time:

Crypto-assets ≠ are not inherently securities.
Utility tokens, collectibles, and network tokens do not fall under securities.
Only “tokenized securities” belong under traditional securities regulation.
A token’s status can “dynamically change” from security → non-security as the technology matures.

This is tantamount to: the United States officially recognizing that crypto-assets are not a one-size-fits-all world of securities, but a multi-layered new asset system. This will profoundly change the future behavior of exchanges, project teams, institutions, developers, and even users.

SEC’s Four-Category Token Regulatory Framework: The New “Basic Rules” for the Industry

The SEC’s four-category token classification and its interpretation are the core of this article — naturally, they are also the focus of industry attention. The following content will parse these four standards layer by layer, and clarify the regulatory implications, future development paths, and industry impact for each category.

Category One: Digital Commodities & Network Tokens

1）What is this?

The core feature of this category: it does not rely on the issuer’s “essential managerial efforts” to increase value; its value comes from the functional nature of the network protocol and decentralized operation. Its most notable characteristic is that the token’s use value significantly outweighs its speculative value.

Paul Atkins made it clear that, in his view, these tokens do not fall under the securities umbrella. This provides a clear regulatory position for major cryptocurrencies such as Bitcoin and Ethereum.

This means:

“Independently operating network tokens” of major chains like BTC and ETH fall into this category
They are not securities
They are not subject to the SEC’s traditional securities laws

This is a major signal: for the first time, the United States has clarified that public-chain tokens such as Bitcoin and Ethereum are digital commodities rather than securities. This will directly accelerate institutionalization across mining, staking, DeFi, and derivatives markets.

2）Industry significance

The introduction of this classification is equivalent to:

Institutional investment can legitimately enter the BTC/ETH ecosystem
A clearer construction path for project teams: decentralization is the key to compliance
Institutional products such as ETFs, futures, and custody will further expand

This is a boon for the entire Layer 1 ecosystem.

Category Two: Digital Collectibles (NFT-type Assets)

1）What assets fall into this category?

Art NFTs: music, video, game items, digital trading cards
Virtual IP, avatars, limited digital memorabilia

The SEC made it clear:

These tokens are not securities
Purchase purposes are based on collection, access, or usage
They do not rely on the project team’s continued operation to generate profits

By explicitly excluding such digital collectibles from the definition of securities, the SEC has provided urgently needed regulatory certainty for the NFT market — this means the NFT market has, for the first time, received confirmation of “non-security status.”

2）Industry significance

NFT projects will no longer face policy risk of being labeled securities;
Exchanges can more freely expand the NFT market;
Enormous room for development in chain gaming, digital content, and brand IP;
NFT 2.0 (asset credentials, on-chain identity, membership systems) will enter a boom cycle.

Category Three: Digital Utilities (Utility Tokens)

This covers tokens with practical functions, such as memberships, tickets, credentials, proofs of ownership, or identity badges. These functional tokens focus on specific uses rather than investment objectives, and thus are carved out from the securities category. Purchasers do not expect to profit from the “managerial efforts of others.” This class of tokens has been a persistent point of controversy, and the SEC has finally provided a clear definition.

1）Core characteristics of utility tokens:

Used to access a service (tickets, memberships, bandwidth, computing power).
Used for on-chain identity, credentials, or functional usage.
Do not provide purchasers with an “expectation of profits from the efforts of others”.

The SEC made it clear:

Utility tokens are not securities.
They focus on practical use cases and do not constitute investment contracts.
As networks mature, the role of the project team diminishes.

In other words: the majority of tokens that were forced to “pretend to be securities” over the past decade due to regulatory ambiguity finally have a compliant industry positioning. Why is this important? Because a large number of tokens in the current market — including most public-chain ecosystem tokens, governance tokens, application tokens, and GameFi tokens — may fall into this category.

2）This will significantly change:

The issuance logic of Launchpads.
The way users participate in token economies.
The compliance documentation required by exchanges to list assets.

Utility tokens derive their value from usage scenarios rather than investment expectations — this gives the industry a completely different narrative framework.

Category Four: Tokenized Securities

This is the only token type classified as a security. Paul Atkins emphasized: “A stock doesn’t change its nature as stock because it’s represented by paper certificates, DTCC account records, or blockchain tokens. A bond doesn’t cease to be a bond because smart contracts track its payment flows.”

1）Types include:

Tokenized versions of equities.
Tokenized versions of bonds.
REITs, fund shares.
Any “on-chain form of traditional securities”.

The SEC stressed: an asset does not cease to be a security simply because it is converted into token form. A stock is still a stock, a bond is still a bond, an ETF is still an ETF — only the recording medium and settlement method change.

2）Industry significance

This classification lays the foundation for a “Wall Street on-chain.” In the future, we will see:

Tokenized Treasuries
Tokenized equities
On-chain funds
On-chain versions of all financial products

This market will be in the tens of trillions. Exchanges, custodians, and compliance firms will form a new competitive landscape here.

The SEC’s “Dynamic Token Identity” Is the Most Revolutionary Part

The four-category structure is not the SEC’s biggest breakthrough. The real breakthrough is that, for the first time, the SEC acknowledges: a token can transform from a security → a non-security.

When a network is sufficiently decentralized:

The project team’s managerial efforts no longer determine value;
The token’s usage scenarios operate independently;
Governance is dispersed;
Protocol upgrades are driven by the community;

As long as the above prerequisites are met, the token can exit its “investment contract” status. This resolves the biggest issue of the past decade: “A token might look like a security at issuance — what happens once it matures?” Now the U.S. has provided the answer: a token need not carry a lifelong securities attribute because of the “manner of issuance.”

This will affect:

New projects’ token issuance routes
Regulatory exemption paths
Community governance models
The pace of project decentralization

This is the first truly operable regulatory path the industry has seen in ten years.

Industry Impact — A SuperEx Perspective

Exchanges (especially CEXs) will face business-structure overhauls

Exchanges will need to update along the four categories in the future:

Listing classifications
KYC/AML models
Risk disclosures
Trading-pair categories
Clearing and custody compatibility

In particular:

NFT markets can expand more boldly
Utility-token listings will have a stronger regulatory basis
Tokenized securities will require dedicated compliant zones

U.S. exchanges will be affected first, but global platforms will gradually align to the same standards.

Project teams: decentralization and functional delivery will be the only compliant path

This classification system sends a clear signal to project teams: don’t treat tokens as financing tools — treat them as functional tools. Over the next 3–5 years, a project’s core competitiveness will be:

Whether true decentralization can be achieved.
Whether there is natural on-chain usage demand.
Whether the token can shift from “investment contract” to “network function”.
Whether the team can reduce key centralized developer control.

Projects will move more rapidly toward:

DAO-ization.
Modular governance.
Code immutability.
Autonomous protocol operation.

Institutions: digital commodities and on-chain securities will enter “dual fast lanes”

Institutions have long been constrained by compliance concerns. Now two paths are clearly delineated:

(1) Digital commodities (BTC/ETH) path:

Futures, perpetuals, and ETFs can all expand.
Capital can participate with lower legal risk.
The on-chain derivatives market will boom.

(2) Tokenized securities path:

Wall Street enters crypto.
Treasuries, funds, and bonds will be issued on-chain in large numbers.
On-chain settlement will become the institutional standard.

The U.S. will use regulatory clarity to re-compete for global crypto leadership

Over the past five years:

Europe has MiCA.
Hong Kong opened a licensing regime.
Singapore advanced compliant asset management.
The U.S. lagged behind for a long time.

But the Token Classification Law changes all this: it is the “inflection point” for the U.S. to vie for the definitional power of crypto regulation. Over the next decade, global crypto regulation may be rebuilt along U.S. lines.

Conclusion

The SEC’s four-category token classification system is not a simple compliance policy; it is:

A definitional standard for digital assets.
A rules foundation for industry participants.
The shared boundary of innovation and compliance.
A blueprint for global regulation over the next decade.
An accelerator for the convergence of crypto and traditional finance

For the first time, it allows the industry to answer three most fundamental questions:

What is a security?
What is not a security?
How can a token transform from a security into a non-security?

This not only ends the crypto industry’s ten-year regulatory fog, but also opens a decade-long period of institutionalized growth. The future crypto world will not be just the “coin circle,” but rather: