U.S. regulators took a decisive step toward reshaping crypto oversight yesterday, with the Securities and Exchange Commission and the Commodity Futures Trading Commission jointly issuing new guidance that states most digital assets are not securities.
The 68-page interpretation, released Tuesday, outlines how federal securities laws apply to cryptocurrencies and introduces a formal classification system for different types of tokens. The move marks a shift in tone and policy from prior years, when regulators often relied on enforcement actions and broad interpretations of securities law.
SEC Chair Paul Atkins framed the change as a return to clarity and statutory limits.
“After more than a decade of uncertainty, this interpretation will provide market participants with a clear understanding of how the Commission treats crypto assets,” he said. Speaking at the DC Blockchain Summit in Washington, Atkins added, “We’re not the ‘securities and everything commission’ anymore.”
At the center of the guidance is a “token taxonomy” that divides digital assets into several categories. According to the agencies, stablecoins, digital commodities, and “digital tools” are not securities.
Digital collectibles, including tokenized representations of art, media, or cultural items, also fall outside securities classification.
Only one category, described as “digital securities,” remains subject to traditional securities laws. These are assets that mirror existing financial instruments, such as equities or debt, but are issued and traded using blockchain infrastructure.
The framework attempts to resolve a long-running debate over how to apply the SEC v. W.J. Howey Co. standard, known as the Howey Test, to crypto markets. That test determines whether a transaction qualifies as an investment contract based on expectations of profit derived from the efforts of others.
Under the new interpretation, a digital asset that is not inherently a security can become one if it is marketed as an investment in a common enterprise with promises of profit tied to managerial efforts. The guidance also clarifies that such a designation is not permanent. Once those promises are fulfilled or no longer relevant, the asset may cease to be treated as a security.
The agencies also addressed specific crypto activities that have drawn regulatory scrutiny. Protocol mining, staking, and certain airdrops do not constitute securities transactions under the new framework. The guidance states that airdrops, in particular, may not meet the “investment of money” requirement under the Howey Test.
The CFTC endorsed the interpretation and aligned its approach with the SEC, signaling closer coordination between the two regulators. CFTC Chair Mike Selig said the joint effort reflects a broader push toward regulatory “harmonization” and provides a clearer path for market participants.
The announcement stands in contrast to the approach taken under former SEC Chair Gary Gensler, whose tenure was defined by enforcement actions against major crypto firms and a view that many tokens qualified as securities. Industry participants often criticized that strategy as “regulation by enforcement,” arguing it created uncertainty and limited innovation.
The new guidance acknowledges those concerns, stating that prior efforts did not fully address the unique characteristics of digital asset markets. It positions the taxonomy as a foundation for a more tailored regulatory framework that can support both compliance and technological development.
More crypto proposals are coming
Despite its scope, the interpretation does not carry the force of formal rulemaking. Atkins said the SEC plans to introduce additional proposals in the coming weeks, including an “innovation exemption” aimed at giving crypto firms more flexibility while maintaining investor protections.
Lawmakers in Congress are also working on legislation to establish a comprehensive market structure for digital assets. Regulators indicated that statutory changes will be needed to make the new approach permanent.
For now, the guidance sends a clear signal that U.S. regulators are redefining their stance on crypto. By narrowing the definition of what constitutes a security and outlining specific categories, the SEC and CFTC have moved to provide the clarity that industry participants have sought for years.
The shift may reshape how crypto businesses operate in the United States, with regulators emphasizing defined boundaries over broad enforcement.
