SEC and CFTC release landmark guidance declaring most crypto assets are not securities

• The SEC and CFTC issued a 68-page joint
  interpretation on March 17, 2026, clarifying that most crypto assets
  are not securities.
• The guidance establishes five categories:
  digital commodities, digital collectibles, digital tools, stablecoins,
  and digital securities.
• The interpretation explicitly clarifies
  that protocol mining, staking, and airdrops generally do not fall
  under federal securities laws.

The
U.S. Securities and Exchange Commission (SEC) and the Commodity Futures
Trading Commission (CFTC) have issued a landmark
joint interpretation clarifying the application of federal securities
laws to the digital asset market. Released on March 17, 2026, the guidance
marks a significant pivot from previous regulatory stances by formally
asserting that the vast majority of crypto assets do not qualify as
securities on their own.

Under the leadership of SEC Chairman
Paul Atkins, the commission introduced a new token taxonomy designed
to provide long-awaited regulatory certainty. The framework identifies four
categories of assets—digital commodities, digital collectibles, digital
tools, and payment stablecoins—that are generally excluded from the
definition of a security. Only “digital securities,” defined as
traditional financial instruments issued via blockchain technology, remain
under the SEC’s primary jurisdiction. Assets like Bitcoin, Ethereum, and
Solana were explicitly highlighted as digital commodities rather than
securities.

The 68-page document also addresses specific industry
practices that have long occupied a legal gray area. The agencies clarified
that protocol mining, staking, and airdrops do not typically
constitute investment contracts. However, the SEC noted that a
“non-security crypto asset” could still become subject to securities laws
if it is offered as part of an investment contract—specifically when
an issuer induces investment by promising essential managerial efforts
intended to generate profit for the purchaser.

“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. This is what regulatory agencies are
supposed to do: draw clear lines in clear terms,” said SEC Chairman Paul
Atkins.

The interpretation also acknowledges the
“transitory” nature of investment contracts, stating that an asset
initially sold as a security can cease to be one as a network
becomes sufficiently functional or decentralized. This alignment between
the SEC and CFTC is intended to serve as a bridge while Congress works
to pass comprehensive market structure legislation, such as the CLARITY
Act, which is expected to reach the President’s desk later this
year.

Disclaimer: This article is for informational purposes
only and does not constitute advice of any kind. Readers should conduct
their own research before making any decisions.