SEC and CFTC Issue Joint Guidance on Crypto Assets, Clarifying Regulatory Scope
The U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have jointly issued interpretive guidance defining various crypto asset types and outlining their regulatory approach. This marks the first time the agencies have provided such clear definitions for crypto assets.
SEC Chairman Paul Atkins stated that the interpretation aims to provide clarity to market participants on how crypto assets are treated under federal securities laws. He emphasized a key shift in regulatory perspective:
"Most crypto assets are not themselves securities."
This stance notably contrasts with the previous SEC administration under Gary Gensler.
Key Classifications and Regulatory Scope
The guidance establishes four categories for crypto tokens, clarifying that only "digital securities" fall under federal securities laws. Digital securities are defined as traditional securities utilizing new technology.
The SEC's interpretation clarifies that its reach into digital securities does not include:
- Airdrops
- Protocol mining
- Protocol staking
An asset becomes a security when its issuer offers it as an investment in a common enterprise with promises of profits based on management's efforts. This investment contract status can cease if the issuer fulfills or fails to satisfy its representations.
Future Steps and Interagency Cooperation
SEC Chairman Atkins indicated plans to launch a formal rulemaking process within weeks, which will include further crypto proposals and an "innovation exemption" for crypto firms.
CFTC Chairman Mike Selig confirmed his agency's alignment with the new taxonomy, emphasizing "harmonization" between the two agencies and encouraging building within the United States.
Atkins noted that permanent policy shifts in pro-digital assets policy would ultimately require new legislation from Congress.