Crypto regulation is evolving in the United States with a major clarification on NFTs. Indeed, SEC Chairman Paul Atkins explained that these digital assets are generally considered collectibles. Thus, they do not fall under securities laws in most cases.
In brief
- The SEC generally considers NFTs to be collectibles and not securities.
- Four types of digital assets are identified as falling outside the scope of financial securities laws.
- NFTs remain evaluated on a case-by-case basis depending on their structure and actual use.
- Uncertainties persist despite these clarifications in a regulatory framework that is still evolving.
Four types of digital assets fall outside the scope of securities
After the US Securities and Exchange Commission (SEC) issued an interpretation establishing that most cryptoassets are not securities. the regulatory framework is gaining clarity.
In an interview with CNBC on Wednesday, Paul Atkins confirmed this approach. He explained that the recent publication identifies four types of digital assets generally excluded from securities.
- digital raw materials
- digital tools
- digital collectibles like NFTs
- stablecoins
Thus, this distinction, according to Atkins, makes it possible to better structure the market. Additionally, it helps businesses and investors understand the applicable rules.
NFTs are considered collectibles but analyzed on a case-by-case basis
Furthermore, he said that NFTs (Non-Fungible Tokens) are closer to classic collectibles. Indeed, users often buy them to keep them, and not to generate a direct financial return. Consequently, these digital assets do not meet, in the majority of cases, the definition of an investment contract. This distinction remains essential in regulatory analysis.
This approach brings NFTs closer to physical objects like baseball cards, that is, goods that users buy and hold, rather than assets intended to be traded. Their main use thus plays a determining role in their classification.
However, regulation is not based on a single rule. According to Atkins, each NFT is evaluated based on its own characteristics. The authorities examine in particular the conditions of sale, the associated promises and the role of the issuer.
Thus, certain projects can be reclassified as securities depending on their structure. However, the majority of NFTs remain outside this framework. This case-by-case approach makes it possible to avoid a too rigid classification of the market according to the president of the DRY.
A regulatory clarification which still leaves uncertainties about NFTs
These clarifications come after the American financial policeman mentioned, in another context, the establishment of a security zone for crypto companies. This measure provides a more flexible framework during the early phases of development.
However, these elements do not dispel all the uncertainties. The design and use of NFTs further determine their qualification. Therefore, certain situations may still generate different interpretations.
In addition, this approach is part of a regulatory environment in construction. The rules remain variable between jurisdictions, which complicates their application on an international scale. Thus, the regulatory trajectory remains open. Between progressive clarification and adaptation to uses, the authorities will have to adjust their position in the face of a constantly evolving crypto market.
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