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The U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission jointly releaseda 68-page interpretive guidance on Tuesday stating that most cryptocurrencies are not securities. It is the first time the SEC has formally categorized digital assets into distinct classes.
SEC Chair Paul Atkins introduced the framework at the DC Blockchain Summit in Washington, D.C. He said the guidance establishes four token categories. Only one, digital securities, which are traditional financial instruments issued using new technology, remains subject to securitiesl aws.
The other three categories are digital commodities, digital collectibles, and digital tools. Stablecoins are also excluded from the securities classification. The guidanceadditionally covers how federal securities laws apply to protocol mining, staking, airdrops, and the wrapping of non-security assets.
The document definesdigital commodities as assets that derive their value from the programmatic operation of a functional crypto system, alongside standard supply and demand forces. Digital collectibles representing rights to trading cards, current events, or similar items also fall outside the securities definition. The guidance clarifies that these categories are not securities regardless of how they are issued or distributed.
The framework also explains how a non-security token could acquire securities status. That happens when an issuer offers a token by inviting investment in a common enterprise and makes representations that buyers can expect profits from the issuer’s managerial efforts. The standard is rooted in the Howey Test, drawn from a 1946 U.S. Supreme Court ruling.
The new approach contrasts with the stance taken by former SEC Chair Gary Gensler. Gensler brought enforcement actions against several major crypto firms and maintained that most digital assets were securities. Atkins said on Tuesday that the agency would no longer take that expansive position.
“We’re not the ‘securities and everything commission’ anymore,” Atkins said, drawing applause from the audience. CFTC Chairman Mike Selig, who also spoke at the summit, said the guidance ends years of ambiguity for industry participants. The two agencies recently formalized a cooperative arrangement to regulate crypto together, and Tuesday’s release was one of the first joint outputs of that partnership.
Atkins cautioned that the guidance does not carry the weight of formal rulemaking. He said only an act of Congress can permanently enshrine the new policy direction. Lawmakers are currently drafting legislation to establish a comprehensive digital asset regulatory framework.
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Source: coinmarketcap.com