SEC Issues First-Ever Crypto Asset Classification Framework

The U.S. Securities and Exchange Commission on Tuesday published its first formal framework for classifying cryptocurrency assets, a landmark move that ends more than a decade of regulatory ambiguity and dramatically narrows the agency's claimed authority over digital markets.

The interpretive guidance, issued jointly with the Commodity Futures Trading Commission, establishes a "token taxonomy" that sorts crypto assets into four categories: digital commodities, digital collectibles, digital tools, and digital securities. Only the last category — digital securities, which SEC Chairman Paul Atkins described as "traditional securities in new technology" — will remain subject to federal securities laws. The framework also addresses stablecoins, airdrops, protocol mining, protocol staking, and the wrapping of non-security crypto assets, explicitly placing several of these activities outside the SEC's regulatory perimeter.

"Most crypto assets are not themselves securities," Atkins declared at the Digital Chamber's DC Blockchain Summit in Washington, drawing enthusiastic applause from attendees. "We're not the securities and everything commission anymore." The guidance specifies that a digital asset qualifies as a security only when its issuer offers it as an investment in a common enterprise with promises of profits derived from management's efforts — and crucially, that such classification can expire once the issuer either fulfills or fails to deliver on those promises.

The joint release represents a concrete product of the SEC-CFTC partnership formalized just days earlier, as the two agencies pursue what CFTC Chairman Mike Selig called "harmonization" of their crypto oversight. "For far too long, American builders, innovators, and entrepreneurs have awaited clear guidance on the status of crypto assets under the federal securities and commodity laws," Selig said, adding that the CFTC is adopting the same taxonomy. He characterized the message as unmistakable: "It's time to build in the United States."

Atkins told reporters the guidance is a precursor to a formal rulemaking proposal expected within one to two weeks, reportedly spanning more than 400 pages and including an "innovation exemption" for crypto firms. He cautioned, however, that only legislation currently being developed in Congress can guarantee the permanence of these policy shifts. The framework marks a sharp departure from the approach of former Chairman Gary Gensler, whose SEC pursued dozens of enforcement actions against crypto companies while declining to issue tailored regulatory guidance — a stance the industry widely condemned as regulation by enforcement. Bitcoin was trading near $74,500 at the time of the announcement.