SEC Issues Groundbreaking Guidance on Regulating Digital Assets

The US Securities and Exchange Commission (SEC) has issued a landmark guidance document outlining how it will regulate digital assets. In a significant shift from its previous stance, the agency now says that most crypto assets are not securities.

The new framework, which was jointly released with the Commodity Futures Trading Commission (CFTC), introduces a 'token taxonomy' that categorizes crypto assets into five types: digital commodities, digital collectibles, digital tools, stablecoins, and digital securities. Of these categories, only tokenized traditional securities will remain under SEC oversight.

SEC Chair Paul Atkins stated that an investment contract ends when the issuer fulfills or fails to meet its promises, at which point the asset would no longer be regulated as a security. The agency has also clarified that it does not extend its jurisdiction over airdrops, protocol staking, or protocol mining.