The US Securities and Exchange Commission together with the Commodity Futures Trading Commission have published their first interpretive rule which establishes the criteria for US legal classification of cryptocurrency assets thereby providing the most detailed regulatory guidance in recent years.
The 68-page rule which was published on March 17 replaces previous guidelines while creating official criteria to assess which digital assets should be treated as securities.
New classification system for crypto assets
The rule introduces five categories for digital assets: digital commodities, digital collectibles, digital tools, stablecoins and digital securities.
The first three categories are explicitly considered non-securities. The SEC also identified several major cryptocurrencies, including Bitcoin, Ethereum, Solana, XRP and Cardano — as digital commodities.
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Under this framework, the CFTC is expected to oversee digital commodity markets, while the SEC will retain authority over digital securities.
Tokens can change regulatory status
The guidance introduces a new approach where a token’s classification can evolve over time.
A token may be treated as part of an investment contract if it is sold with promises of managerial efforts that create an expectation of profit. Once those conditions are no longer present, the token may no longer be considered a security.
The rule also clarifies that informal promotion, such as social media hype or influencer endorsements, does not by itself create a securities classification.
Staking, mining and airdrops clarified
The agencies said that common blockchain activities such as staking and mining do not qualify as securities transactions, as they are considered technical processes rather than managerial efforts.
Wrapped tokens and liquid staking tokens are also not treated as securities if they are backed one-to-one by underlying assets.
Airdrops which distribute free tokens to users who make no payment do not qualify as investments according to legal standards thus they do not meet the criteria for securities classification.
Securities regulations might apply to platforms that offer guaranteed returns through staking or that utilize customer assets for their own business operations.
The regulators determined that the practices required organizations to make flexible choices because this feature established conditions for securities classification.
The rule functions as a pivotal moment according to Paul Atkins because it ends the long period of unpredictable regulatory conditions which had existed before. CFTC Chairman Michael Selig declared that the rule finally delivers the industrydefining legal clarification which stakeholders have been waiting to receive.
The rule remains available for public feedback which may lead to its improvement while it establishes a movement toward developing precise regulatory methods that replace enforcement-based strategies.
