A joint 68-page document establishes a token taxonomy and redefines the regulatory perimeter for stablecoins, digital commodities, and digital tools.
The Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) published on Tuesday, March 17, a joint 68-page document declaring that most digital assets are not securities. The guidance, presented at the DC Blockchain Summit in Washington D.C., marks a sharp departure from the regulatory approach of the Biden administration.
SEC Chairman Paul Atkins commented: “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.”
The new interpretation introduces a token taxonomy that classifies stablecoins, digital commodities, and “digital tools” as assets that do not fall within the definition of a security. The document also clarifies how federal securities laws apply to mining, staking, and airdrops. According to the fact sheet published by the agencies, digital commodities are not securities if they are “intrinsically tied to and derive their value from the programmatic operation of a ‘functional’ crypto system, as well as from supply and demand dynamics.” Digital collectibles representing rights to trading cards, current events, and other items will also not be considered securities.
The document also addresses the circumstances under which a crypto asset that is not a security could become one: “A non-security crypto asset becomes subject to an investment contract when an issuer offers it by inducing an investment of money in a common enterprise with statements or promises to undertake essential managerial efforts from which a purchaser would reasonably expect to derive profits,” the SEC interpretation reads.
The agency has historically applied the Howey Test, based on a 1946 U.S. Supreme Court ruling, to determine whether an asset qualifies as an investment contract and therefore as a security. Since late 2025, Atkins had signaled that the agency would publish a plan for a token taxonomy, rooted in the Howey Test itself, to distinguish which cryptocurrencies fall within the category of securities.
The current approach stands in contrast to that of his predecessor Gary Gensler, who under the Biden administration had adopted a more aggressive stance toward the crypto sector, filing numerous lawsuits against major industry companies and arguing that most cryptocurrencies were securities.
