SEC Chairman Atkins: "Despite What the SEC Has Said In the Past, Most Crypto Assets Are Not Securities"

Plus the Second Circuit overturns the conviction in the first insider trading case involving digital assets.

SPONSORED BY

Good morning! Here’s what’s up.

Clips ✂️

American Leadership in the Digital Finance Revolution

Yesterday, the President’s Working Group on Digital Asset Markets released the PWG Report with clear recommendations for the SEC and other federal agencies to build a framework to maintain U.S. dominance in crypto asset markets. This report is the blueprint to make America first in blockchain and crypto technology. The President said last week that he wants “the entire world running on the backbone of American technology.” I stand ready to help get that job done.

That is why I am launching Project Crypto and directing the SEC’s policy divisions to work with the Crypto Task Force, led by Commissioner Peirce, to swiftly develop proposals to implement the PWG’s recommendations. Project Crypto will help ensure that the United States remains the best place in the world to start a business, develop cutting-edge technologies, and participate in capital markets. We will reshore the crypto businesses that fled our country, particularly those that were crippled by the previous administration’s regulation-by-enforcement crusade and “Operation Chokepoint 2.0.” Whether an incumbent or a new entrant, the SEC welcomes all market participants who are hungry to innovate.

In accord with the PWG Report’s recommendations, I have directed the Commission staff to draft clear and simple rules of the road for crypto asset distributions, custody, and trading for public notice and comment. While the Commission staff works to finalize these regulations, the Commission and its staff will in the coming months consider using interpretative, exemptive, and other authorities to make sure that archaic rules and regulations do not smother innovation and entrepreneurship in America. Many of the Commission’s legacy rules and regulations do not make sense in the twenty-first century—let alone for on-chain markets. The Commission must revamp its rulebook so that regulatory moats do not hinder progress and competition—from both new entrants and incumbents—to the detriment of Main Street.

Speech by SEC Chairman Paul Atkins

👉 Chairman Atkins stated in his speech that “[d]espite what the SEC has said in the past, most crypto assets are not securities. But confusion over the application of the ‘Howey test’ has led some innovators to prophylactically treat all crypto assets as such.”

US appeals court overturns first NFT insider trading conviction

A divided federal appeals court on Thursday overturned the fraud conviction of a former product manager at OpenSea, the world’s largest marketplace for non-fungible tokens, in what prosecutors called the first insider trading case involving digital assets.

The 2nd U.S. Circuit Court of Appeals in Manhattan agreed with Nathaniel Chastain that erroneous jury instructions could have led to his conviction merely for acting unethically, by misusing information that had no real value to his employer.

Chastain, a 35-year-old Massachusetts native, had been appealing his May 2023 wire fraud and money laundering conviction and three-month prison sentence.

by Reuters

The SEC Should Embrace Tokenized Equity, Not Strangle It

The SEC should grant no-action relief to firms ready to pilot tokenized equity trading. Let them demonstrate how on-chain markets can provide better price discovery, faster settlement and stronger investor protections than our jury-rigged legacy system. Use these experiments to inform eventual rulemaking, not delay innovation while incumbents fortify their moats.

Crypto firms won’t necessarily replace traditional finance overnight, but the SEC should open the no-action relief channels now and let partnerships between crypto and traditional finance blossom through organic negotiations, rather than putting its hand on the outcome to pick winners and losers.

Peirce’s innovation sandbox proposal shows the way. In her remarks at SEC Speaks in May, she revealed that the SEC’s Crypto Task Force is “considering a potential exemptive order that would allow firms to use DLT to issue, trade, and settle securities.” This conditional exemption would permit innovative trading systems for tokenized securities while requiring appropriate disclosures, recordkeeping, monitoring and adequate financial resources. It’s a practical approach that allows real-world testing under SEC oversight rather than years of theoretical rulemaking.

by Veritas Financial Analytics LLC

👉 Article by J.W. Verret.

Crypto world and Tyler Winklevoss are in an uproar over ‘concerning’ Quintenz email reveal

The crypto industry is in an uproar after emails from Commodity Futures Trading Commission (CFTC) nominee Brian Quintenz began circulating on Capitol Hill this week, which sources told me is the reason his nomination has been delayed by the White House.

The emails, obtained via a FOIA request shared with The Post, show that during his nomination process to become chair, his associates tried to obtain information that has a direct impact on the betting markets the CFTC oversees — and which Quintenz has a personal financial interest in.

The main issue is that despite his pledge not to benefit from his access, Quintenz remains on the board of Kalshi, a betting company regulated by the CFTC.

by NY Post

👉 The article adds that one of Quintenz’s most outspoken critics is Tyler Winklevoss, the billionaire co-founder of Gemini. It states that “in a rather bizarre turn of events, Winklevoss said Quintenz boarded a plane on Wednesday, flew to New York, and arrived at his office unannounced looking for him. He was turned away and told Winklevoss was unavailable.”

Copper ‘Lotto Tickets’ Pay Off After Trump Shrinks From Tariffs

Options traders who bet the Trump administration would renege on its promise to tariff raw copper imports are cashing in big.

On Wednesday evening, more than 31,000 contracts went from out-of-the-money to in-the-money after President Donald Trump shockingly exempted the most widely imported form of copper. The contracts, now with a notional value of $3.54 billion, reflect a significant shift in the copper options market. That’s a sharp increase from Tuesday evening, when only 675 in-the-money put options were recorded, valued at $94.4 million.

by Bloomberg Law

SPONSORED BY

Securities Enforcement Forum Central 2025 is set for Thursday, September 25, 2025 at the Ritz-Carlton Chicago! Join us in person or tune in virtually to hear from 40+ luminaries in the securities enforcement field—including numerous senior officials from the SEC, in-house counsel from major corporations, and lawyers and consultants from the best firms and in the world.

👉 Please register here. See you September 25 in Chicago!!!

X