- NFTs are generally treated as digital collectibles, not securities, under the SEC’s updated framework.
- Classification still depends on structure, particularly whether profit expectations rely on others’ efforts.
- The new guidance aims to clarify crypto rules while allowing flexibility for edge cases.
US SEC Chair Paul Atkins has stated that NFTs are typically not considered securities, describing them as digital collectibles that fall outside traditional investment frameworks. His comments build on recent regulatory guidance aimed at clarifying how different crypto assets are classified.
Under the SEC’s updated taxonomy, digital assets are divided into several categories, with only one group defined as securities. NFTs are included within digital collectibles, a category that also covers items tied to creative works, gaming assets and internet culture.
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Role of Investor Expectations
Atkins explained that these assets are usually acquired in a manner similar to physical collectibles, rather than as part of an investment contract. This distinction is central to securities law, where classification depends on whether purchasers expect profits based on the efforts of others.
Despite this general position, Atkins cautioned that the regulatory outcome is always dependent on specific circumstances. He acknowledged that digital collectibles could resemble securities if structured in a way that meets the legal definition of an investment contract.
The SEC’s broader guidance also highlights that most crypto assets do not meet the threshold for securities classification, offering clearer boundaries for market participants after years of uncertainty. At the same time, the framework allows for flexibility, noting that assets may be linked to investment contracts in certain cases without being treated as securities in all contexts.
For NFTs, the key factor remains how they are presented. Where they are marketed without promises of profit tied to managerial efforts, they are generally treated as non-securities under the new framework.
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