Last week, SEC Commissioner Paul Atkins quietly dropped what should have been the biggest headline in crypto this year: “Most crypto assets are not securities,” he said, in sharp contrast to the SEC’s long-standing position. The markets didn’t blink, but the implications are seismic.
The following opinion editorial was written by Joseph Collement, Chief Legal Officer & Head of News at Bitcoin.com.
For those who’ve watched the SEC’s contentious relationship with crypto unfold over the past eight years, this moment felt like a quiet but decisive surrender, a strong signal that the tides may finally be turning.
Howey Got Here
Since 2017, the SEC has assumed the role of crypto’s de facto regulator despite lacking explicit congressional authority to do so. It leveraged the Howey Test, a 1946 Supreme Court decision, to categorize a wide array of digital assets as securities. In Howey, landowners sold plots of citrus groves with the promise that others would cultivate and sell the fruit on their behalf. The Court ruled that these arrangements qualified as “investment contracts,” thus falling under securities laws.
The SEC applied this standard aggressively, labeling globally traded, decentralized cryptocurrencies and tokens as investment contracts. The result was a regulatory environment where even non-custodial software projects needed costly legal opinions just to stay listed on exchanges. I wrote many of those opinions myself. Projects that couldn’t afford them were often delisted without recourse.
In 2018, a rare ray of clarity emerged. Then-SEC Director William Hinman stated that some crypto assets could evolve beyond security status—using Ethereum as an example of a token that had become “sufficiently decentralized.” While not official guidance, it offered the industry hope that a path to compliance was possible.
The Gensler Clampdown
That hope evaporated when Gary Gensler was appointed SEC Chair in 2021 by Joe Biden. Despite teaching blockchain at MIT and previously acknowledging that major cryptos like ETH, LTC, and BCH were not securities, Gensler soon took an aggressively enforcement-driven stance. Under his leadership, the agency pivoted from dialogue to intimidation and went on a legal rampage.
Well-established projects like LBRY, which aimed to decentralize content publishing, were crushed. XRP was dragged into years-long litigation despite having actual utility in cross-border banking. Coinbase, the most compliant U.S. exchange, received a Wells notice. As Brian Armstrong said, “Instead of publishing a clear rule book, the SEC has taken a regulation-by-enforcement approach that is harming America.”
Ironically, while the SEC focused on good actors, FTX was using customer funds to buy political influence, reportedly while maintaining direct lines of communication with Gensler himself.
This wasn’t regulation. It was selective enforcement.
Then Came the Meme Coin Moment
The true plot twist came on January 17, 2025: three days before his second inauguration, Donald Trump launched his own cryptocurrency token $TRUMP. It was hyped on Telegram, traded only on decentralized exchanges, and dropped the same night he hosted a “Crypto Ball” just blocks from the White House.
From a regulatory lens, $TRUMP should have immediately been called out as a security by the SEC. And yet, total silence from Gensler. No press release. No investigation. No comment.
If this had been launched by anyone else, enforcement would have been swift and severe. But this time, not a single subpoena dropped.
That silence? That was the moment the SEC quietly surrendered to Crypto.
The Aftermath
I’ll say it: we are so back.
You can feel it too. The crypto industry is not just surviving regulatory pressure—it’s thriving.
Platforms like pump.fun are launching thousands of meme coins, embodying crypto’s raw, creative energy. Hyperliquid, a decentralized perpetuals exchange, is now outperforming its centralized peers on UX, liquidity, and execution.
Founders in America are building in public again. Startups are shipping from the U.S. again.
Crypto is reclaiming its cultural edge and permissionless ethos.
So go ahead: launch your token. Build your DAO. Meme like it’s 2021.
Author: Guest Author
Source: Bitcoin
Reviewed By: Editorial Team
