TLDR
- The U.S. Securities and Exchange Commission released its first formal definitions for crypto assets under federal securities laws.
- The SEC coordinated the new guidance with the Commodity Futures Trading Commission to align regulatory oversight.
- Chairman Paul Atkins stated that most crypto assets are not securities under the new interpretation.
- The guidance defines digital commodities, digital collectibles, digital tools, stablecoins, and digital securities.
- The SEC clarified that only digital securities fall within its core regulatory authority.
The U.S. Securities and Exchange Commission (SEC) released its first formal interpretation defining crypto asset categories under federal law. The agency coordinated the guidance with the Commodity Futures Trading Commission and outlined how it will regulate digital tokens. Chairman Paul Atkins said the framework clarifies which crypto assets qualify as securities and which do not.
SEC and CFTC Align on Crypto Assets Taxonomy
The SEC issued the interpretation alongside the CFTC after both agencies formalized a regulatory partnership. The framework outlines digital commodities, digital collectibles, digital tools, stablecoins, and digital securities. Atkins said, “Most crypto assets are not themselves securities,” and he stressed that only digital securities fall under securities laws.
He explained that digital securities represent traditional securities recorded on blockchain networks. He added that the interpretation returns the SEC to its statutory mission of overseeing securities transactions. CFTC Chairman Mike Selig confirmed that his agency adopted the same taxonomy to support regulatory harmonization.
Atkins presented the guidance at the Digital Chamber’s DC Blockchain Summit in Washington.
He said, “After more than a decade of uncertainty, this interpretation will provide market participants with a clear understanding.” He also stated that the SEC no longer acts as “the securities and everything commission,” drawing applause from attendees.
The guidance clarifies that the SEC does not regulate airdrops, protocol mining, or protocol staking when they do not involve securities. It also addresses the wrapping of non-security crypto assets and how laws apply. The agencies stated that the taxonomy aims to provide regulatory certainty within existing statutes.
Investment Contracts and Securities Status
The SEC said a digital asset becomes a security when an issuer offers it as an investment contract. The agency stated that such offerings involve a common enterprise and promises of profit from managerial efforts. Atkins said the investment contract ends when the issuer fulfills or fails to meet those promises.
He explained that once the contract ends, the asset may no longer qualify as a security. The SEC clarified that securities status does not remain permanently attached to a token. The agency said this interpretation aligns with long-standing Supreme Court precedent on investment contracts.
Atkins contrasted the new approach with that of former Chairman Gary Gensler. He said the previous leadership declined to adopt tailored policies for the crypto sector. He emphasized that the new framework directly addresses regulatory gaps in the U.S. market.
The SEC plans to launch a formal rulemaking process within two weeks. Atkins told reporters to “hold on to your seats,” because the agency is preparing dozens of proposals. He said one proposal will exceed 400 pages and will outline an “innovation exemption” for crypto firms.
Atkins also stated that only congressional legislation can ensure lasting policy changes. He said lawmakers are drafting bills to establish a permanent framework for digital assets. He reiterated that the SEC will continue to issue further crypto-related proposals in the coming weeks.
