The SEC and CFTC Unite on Crypto Rules, Saying Most Tokens Aren’t Securities — But Classifications Can Change
In a significant move to end years of regulatory ambiguity, the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) issued joint guidance Tuesday clarifying how federal securities laws apply to many crypto assets. The agencies said the interpretation makes clear that the majority of digital tokens are not securities, while explaining the transactions and token life-cycle events that can bring an asset into — or take it out of — securities regulation.
Why it matters
- The guidance aims to provide long-sought clarity for exchanges, issuers, developers and investors by detailing which crypto activities fall under securities law and which do not.
- The SEC framed the release as a milestone that complements ongoing Congressional efforts to codify a market-structure framework for crypto markets, including the bipartisan CLARITY Act.
Top-level messages from regulators
- SEC Chairman Paul S. Atkins said the interpretation ends “more than a decade of uncertainty” and gives market participants a clearer understanding of how the Commission treats crypto assets under federal securities laws. He emphasized that the guidance recognizes what a prior administration “did not fully acknowledge”: that most crypto assets are not securities.
- Atkins also noted the guidance makes explicit that investment-contract status can end — a point intended to help entrepreneurs and investors while Congress advances market-structure legislation.
- The CFTC endorsed the SEC’s approach and said it will administer the Commodity Exchange Act consistently with the SEC’s interpretation.
What the guidance covers
- A structured token taxonomy separating categories such as digital commodities, digital collectibles, digital tools, stablecoins and digital securities — designed to reduce ambiguity about which regulatory regime applies to different token types and the platforms that handle them.
- The dynamic nature of classification: a non-security crypto asset can become subject to securities rules through certain transactions or evolutions, and conversely an asset’s investment-contract status can cease over time.
- How federal securities laws apply to common crypto practices, including airdrops, protocol mining, protocol staking, and “wrapping” of non-security crypto assets.
What market participants should do
- Regulators urged innovators, issuers, intermediaries and individual investors to review the interpretation to better understand jurisdictional boundaries between the SEC and CFTC.
- The full interpretation will be published on SEC.gov and filed in the Federal Register.
This joint guidance represents a rare instance of cross-agency coordination and a clearer regulatory map for crypto activity — while leaving room for classification changes as tokens and protocols evolve. Image credit: OpenArt; chart: TradingView.com.
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