SEC Cracks Down on Crypto as Congress Descends Into Regulatory Chaos

The SEC just sharpened its knives for crypto—while lawmakers can't decide if digital assets are the future or a fraud. Regulatory whiplash hits DeFi again.

Chair Gensler's enforcement army marches on, labeling everything from stablecoins to staking as unregistered securities. Meanwhile, Capitol Hill debates whether to nuke innovation or embrace it—with all the decisiveness of a decentralized governance token vote.

Market makers shrug and keep trading. After all, nothing fuels crypto volumes like good old-fashioned regulatory uncertainty—the hedge funds' favorite volatility engine.

In Brief

• Atkins distinguishes four types of tokens: tools, collectibles, utilities, and regulated securities.
• The SEC considers that some tokens are no longer securities once the promises have ended.
• Congress is discussing a vague bill on crypto regulation, with no concrete agreement to date.
• Crypto projects are considering exile due to ongoing legal uncertainty in the United States.

Token, Not Token: When the SEC Pulls Out the Regulatory Calculator

Appointed last April, Paul Atkins did not announce a revolution, but a spring cleaning of regulation. Ambiguity is over. The SEC now wants to classify crypto assets by categories. A “token taxonomy” is underway. Objective? To distinguish investments from simple uses.

In his November 12 speech, the SEC chairman decided:

I believe that most crypto tokens traded today are not securities in themselves. Of course, it is possible that a particular token was sold as part of an investment contract during a securities offering.

The message is clear: it’s not the object that matters, but the initial commitment. Once the promises are fulfilled (or forgotten), the token may cease to be a security. An idea that could revolutionize the perception of projects like ethereum or Solana, whose tokens have become autonomous.

The SEC thus introduces four major families: “digital tools,” “collectibles,” “utilities,” and finally “tokenized securities” — the latter remaining under strict monitoring. But for the others, it will depend on the context. This is where ambiguity can become judge again.

A Breath-Holding Congress: The Crypto Market Between Debates and Deadlocks

While the SEC clarifies its position, Congress is bogged down. The bill on the structure of crypto markets is under debate, and the corridors of Capitol Hill echo with questions rather than answers. Who should supervise what: the SEC or the CFTC? Where does one’s jurisdiction end and the other’s begin?

In the midst of government paralysis, Senate Republicans published a draft bill. A still vague draft that leaves some market players skeptical. Paul Atkins himself took a stand:

Our goal is not to expand the SEC’s jurisdiction for fun, but to enable capital formation to thrive while ensuring investor protection.

The crypto industry watches this legislative cacophony with concern. Without clear coordination between regulators, entrepreneurs proceed blindly. Even exchange platforms hesitate to innovate on American soil.

Crypto in Exile: When Regulatory Uncertainty Drives Exodus

An uncertain climate attracts neither capital nor ideas. While the SEC adjusts its compass, many crypto projects choose exile. Where rules are clear, even demanding, trust follows. Singapore, Dubai, Paris are becoming the new playgrounds for crypto tech. The United States risks becoming a secondary stopover.

The “Project Crypto” initiative launched by the SEC aims to stop this flight. Exemptions are under study. Atkins also mentions the idea of hybrid platforms, “super-apps” grouping securities and tokens. But nothing is ready. And the market is not waiting.

Some milestones to better follow:

• November 12, 2025: date of Atkins’ official speech in Philadelphia;
• The SEC now distinguishes 4 types of tokens according to their use;
• A version of the Market Structure Bill has been circulating since early November in the Senate;
• Over 100 consultation meetings have been held by the SEC;
• Several crypto projects mention leaving for abroad due to lack of clarity in the USA.

Another thunderbolt could come from the Commodity Futures Trading Commission (CFTC): after the failed candidacy of Brian Quintenz, the government has proposed Michael Selig, a pro-crypto lawyer, for the agency’s chairmanship. A nomination that could reshuffle the American crypto market cards and shift the balance of power between regulators.

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