SEC Chair Clarifies Why Most NFTs Do Not Qualify as Securities
Washington, D.C. – March 18, 2026 — In a recent interview with CNBC, U.S. Securities and Exchange Commission (SEC) Chair Paul Atkins provided further insight into the agency’s stance that non‑fungible tokens (NFTs) are generally not securities. His remarks build on the SEC’s interpretive release earlier this year, which identified four broad categories of digital assets that fall outside the scope of securities laws: digital commodities, digital tools, digital collectibles such as NFTs, and stablecoins.
What the SEC’s Interpretive Release Says
The SEC’s guidance outlines a framework for evaluating whether a digital asset is subject to federal securities regulations. Central to the analysis is the “investment contract” test derived from the Supreme Court’s Howey decision. An asset is deemed a security when it involves (1) an investment of money, (2) in a common enterprise, (3) with an expectation of profits derived from the efforts of others.
Applying this standard, the SEC concluded that many NFTs—especially those that function as unique collectibles rather than profit‑driven investment vehicles—do not satisfy the criteria for securities. The agency grouped these under the “digital collectibles” category, treating them similarly to physical items such as baseball cards or rare artwork.
Atkins’ Remarks on Digital Collectibles
During the CNBC conversation with host Andrew Ross Sorkin, Atkins acknowledged that the classification of NFTs can depend on the specific facts surrounding each token. He emphasized that most NFTs are purchased and held as immutable items, not as instruments that generate ongoing profit through the efforts of a third party. “A typical NFT is more akin to buying a meme or a baseball card—once you own it, you’re not actively trading it for returns,” he said.
Atkins also noted that while certain tokenized projects could be structured in a way that mimics securities—particularly if they promise revenue sharing or other financial benefits—the SEC’s analysis will remain fact‑based. “The key question is whether there’s an investment contract,” he added. “If the token is simply a collectible, it generally falls outside our jurisdiction.”
Shifting Regulatory Philosophy
The interview highlighted a broader shift in the SEC’s approach under Atkins’ leadership. Since taking the helm in 2024, Atkins has criticized the agency’s prior reliance on “regulation through enforcement” and pledged to adopt a more predictable, guidance‑driven model. He cited tokenization as an innovation deserving support rather than restriction, and warned that past regulatory missteps have left the United States lagging as much as a decade behind other jurisdictions in crypto development.
This policy pivot coincides with a more crypto‑friendly federal administration that began in early 2025. Atkins indicated that the SEC is moving away from case‑by‑case enforcement toward clearer rulemaking, including potential “safe harbor” exemptions for certain crypto activities—a concept he discussed in a separate interview earlier this year.
Analysis
Atkins’ clarification offers a practical lens for market participants seeking regulatory certainty. By reaffirming that the majority of NFTs are treated as digital collectibles, the SEC reduces the likelihood that creators and traders of standard NFTs will face securities compliance obligations. However, the agency’s reminder that each token’s structure matters underscores the need for careful design, especially for projects that incorporate profit‑sharing, royalties, or other financial incentives.
The shift away from enforcement‑centric regulation could accelerate innovation in the NFT space, encouraging developers to experiment with new use cases—such as gaming assets, virtual real‑estate, and identity tokens—without fearing immediate securities litigation. Nonetheless, market actors should remain vigilant and conduct thorough “Howey” analyses for any token that deviates from the pure collectible model.
Key Takeaways
- SEC’s Four Asset Categories: Digital commodities, digital tools, digital collectibles (including NFTs), and stablecoins are generally excluded from securities regulation.
- Investment Contract Test Remains Central: The presence of an investment contract determines securities status; most NFTs lack this element.
- Fact‑Based Assessment: Each NFT is evaluated on its specific characteristics; tokens offering profit expectations may still be classified as securities.
- Regulatory Shift: Under Chair Atkins, the SEC is moving toward clearer guidance and “safe harbor” frameworks, reducing reliance on enforcement actions.
- Implications for Creators: Standard NFT projects that function as pure collectibles are unlikely to trigger securities compliance, but designs involving revenue sharing should be reviewed carefully.
As the SEC continues to refine its digital‑asset framework, industry participants are advised to stay abreast of forthcoming rulemaking and to seek legal counsel when structuring token offerings that might blur the line between collectibles and investment contracts.
Source: https://cointelegraph.com/news/sec-chair-nfts-not-securities-explained?utm_source=rss_feed&utm_medium=feed&utm_campaign=rss_partner_inbound
