Key Highlights

  • The SEC released an interpretive statement outlining how it will apply the federal definition of “security” to crypto assets and introducing a five-part taxonomy. 

  • The categories include digital commodities, digital collectibles, digital tools, stablecoins, and digital securities.

  • The CFTC formally joined the interpretation and said it will administer the Commodity Exchange Act consistently.

The U.S. Securities and Exchange Commission published its first comprehensive interpretation of how federal securities laws apply to crypto assets, offering a detailed framework for classifying tokens and for assessing when a token sale or distribution involves a “security.” 

In the release, the SEC grouped crypto assets into five categories based on “characteristics, uses, and functions”: digital commodities, digital collectibles, digital tools, stablecoins, and digital securities. The agency said that digital commodities, digital collectibles, and digital tools are not securities, whereas digital securities are securities. Stablecoins were treated as a broad bucket that may or may not be securities depending on their design and marketing. 

The interpretation also addresses common crypto activities that have been recurring flashpoints for enforcement and compliance teams, including protocol mining, protocol staking, wrapping, and airdrops, and explains how the Howey test may apply across those fact patterns. The SEC emphasized that the guidance does not replace the Howey test (which remains binding law), but reflects the Commission’s current views and is intended to be used by staff, including in enforcement. 

The interpretation supersedes the agency’s 2019 staff framework for analyzing investment contracts in digital assets, signaling a shift from a narrower staff document to a Commission-level taxonomy. 

The Commodity Futures Trading Commission joined the SEC’s release and said it will apply the Commodity Exchange Act consistently with the interpretation, adding that certain non-security crypto assets could meet the definition of “commodity” under the CEA. 

The SEC is also soliciting public comment on the interpretation and noted it may refine or expand the framework based on feedback.