US SEC Issues Crypto Guidance Categorizing Digital Assets

The US Securities and Exchange Commission (SEC) has issued long-awaited guidance on the classification of cryptocurrencies, providing clarity on which digital assets are considered securities.

According to the SEC's new interpretation, cryptocurrencies can be categorized into five types: digital commodities, digital collectibles, digital tools, stablecoins, and digital securities. Federal securities laws only apply to digital securities, which have characteristics similar to traditional stocks or bonds.

The SEC also outlined conditions for a non-security asset to become subject to securities laws if an issuer offers it by promoting investment in a common enterprise from which a purchaser could expect to profit.