XRP News Today: SEC Strives to Foster Innovation While Safeguarding Investors in Revamping Cryptocurrency Regulations

The U.S. Securities and Exchange Commission (SEC) is moving forward with a sweeping new set of rules for cryptocurrencies, designed to clarify regulatory boundaries and promote innovation while protecting investors. Chairman Paul Atkins introduced the plan—called "Project Crypto"—at the Federal Reserve Bank of Philadelphia's Fintech Conference, highlighting a token classification system

for investment contracts. Under this system, crypto assets are divided into separate categories, with digital commodities, collectibles, and utility tokens not subject to securities laws, while would still fall under SEC regulation.

A key element of the proposal is the acknowledgment that investment contracts may "expire" once their obligations are met,

to lose that status as their networks become decentralized. Atkins used the example of William Howey's citrus groves, explaining that the land was only considered a security due to a particular contract—and . This method aims to address industry concerns about inflexible definitions, where tokens are often permanently labeled as securities even after their original purposes have changed.

Meanwhile, legislative efforts to redefine regulatory authority are gaining traction in Congress.

, put forward by Senators John Boozman (R-AR) and Cory Booker (D-NJ), would transfer oversight of "digital commodities" such as and to the Commodity Futures Trading Commission (CFTC). The bill, , aims to clear up regulatory confusion by keeping the SEC in charge of investment contracts and giving the CFTC authority over commodity-like tokens. Supporters believe this split would simplify compliance for trading platforms and limit regulatory loopholes, though some doubt whether the CFTC is equipped to handle the sector's complexity.

The SEC's new classification system could offer immediate benefits for projects like Ripple, whose

token has long been under scrutiny as a potential security. By , the new rules could finally bring regulatory clarity for XRP, paving the way for greater institutional involvement. Atkins also expressed support for enshrining market structure rules in law, of passing crypto-focused legislation before the end of the year. However, he made it clear that the SEC's anti-fraud responsibilities would remain, noting that secondary trading of non-security tokens could take place on platforms outside SEC jurisdiction, including those registered with the CFTC.

Industry participants have responded positively, seeing these changes as progress toward U.S. leadership in digital assets.

the Senate bill as a "step toward clear, practical regulation," while crypto industry leaders have stepped up lobbying to ensure the legislation passes this year. Nonetheless, obstacles remain, about how to regulate decentralized finance (DeFi) and whether the CFTC will have sufficient resources to enforce its new duties.

Atkins' approach seeks to balance the need for innovation with investor safeguards, advocating for exemptions that could make it easier for blockchain projects to raise capital. "A sensible Commission policy on crypto alone won't determine the market's future," he said, stressing that regulatory certainty—not excessive intervention—will help the U.S. maintain its position as a leader in technological innovation. As lawmakers and regulators continue to shape these proposals, the crypto industry stands at a crucial crossroads in its pursuit of long-term growth.