SEC Issues Guidance on Crypto Asset Status

In the United States, the SEC, with support from the CFTC, issued guidance clarifying that most crypto assets are not considered securities.

Crypto Asset Classification

Token Categories

The document defines five categories: digital commodities, digital collectibles, digital tools, stablecoins, and digital securities.

Status Distinctions

The guidance clarifies that a crypto asset that is not itself a security may become subject to an investment contract, and may also cease to be subject to one.

Regulators’ Position

SEC and CFTC Approach

The SEC and CFTC stated they will apply federal securities and commodities laws in line with this guidance.

Policy Shift

This position differs from that of former SEC Chair Gary Gensler, under whose tenure many crypto assets were treated as securities.

Application of Rules

Crypto Operations

The document addresses the application of laws to operations such as airdrops, mining, staking, and the use of wrapped tokens.

Market Participants

Market participants are advised to review the guidance to understand the regulatory responsibilities and jurisdiction of the SEC and CFTC.

Legislative Context

Interim Measure

The guidance serves as an interim step pending Congress’s adoption of legislation on the market structure for crypto assets.

Purpose of the Document

The document aims to provide clarity for investors, issuers, and other market participants regarding regulatory expectations.