The U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) released a joint interpretation on Tuesday, stating that most crypto assets are not themselves securities. This marks the first coordinated step by the two agencies since signing a memorandum of understanding, aiming to provide a unified application of federal securities laws to digital assets.
Token Taxonomy Framework Unveiled
The interpretation introduces a "coherent token taxonomy" that categorizes digital assets into digital commodities, digital collectibles, digital tools, stablecoins, and digital securities. It clarifies how a "non-security crypto asset" may or may not qualify as an investment contract under the Howey test. The SEC called the guidance an "important bridge" while Congress continues work on digital asset market structure legislation.
On-Chain Activities Clarity
Specifically, the joint interpretation addresses how securities laws apply to airdrops, protocol mining, protocol staking, and the wrapping of a non-security crypto asset. These activities had long been subject to regulatory ambiguity, leading to uncertainty for market participants. SEC Chair Paul Atkins stated: "This interpretation acknowledges what the former administration refused to recognize – that most crypto assets are not themselves securities." He added: "After more than a decade of uncertainty, this interpretation will provide market participants with a clear understanding of how the Commission treats crypto assets under federal securities laws."
Only Tokenized Traditional Securities Remain Regulated
Atkins separately noted that only one crypto asset class remains subject to securities laws: "traditional securities that are tokenized." This effectively dismantles the previous enforcement-heavy approach that treated most crypto assets as securities under the Howey test. The fragmented oversight in prior years triggered a series of high-profile enforcement actions against exchanges and projects. Over the long term, this unified interpretation is expected to foster greater institutional adoption and provide the legal certainty needed for sustainable innovation within the U.S. financial ecosystem.