New joint guidance draws clearer jurisdictional lines for crypto markets while preserving the Howey framework and signaling forthcoming safe harbors.
“We’re not the ‘securities and everything commission’ anymore” – SEC Chairman Paul Atkins.
Key Takeaways
- SEC and CFTC issued joint interpretive guidance establishing a five‑category crypto token framework.
- Digital commodities, digital collectibles, digital tools, and stablecoins are not securities by default.
- Digital securities (traditional securities tokenized on a blockchain) remain fully subject to federal securities laws.
- Non‑security tokens may still be sold as investment contracts depending on how they are marketed.
- The guidance recognizes that investment contracts can end, allowing tokens to trade outside SEC oversight.
- The SEC previewed proposed safe harbors intended to provide compliant capital‑raising pathways for crypto projects, including a startup exemption and a fundraising exemption.
A Coordinated Federal Approach to Crypto Regulation
On March 17, 2026, the U.S. Securities and Exchange Commission (SEC) released a 68‑page interpretive statement jointly with the U.S. Commodity Futures Trading Commission (CFTC) clarifying how federal securities laws apply to cryptocurrency assets and transactions. While the interpretation does not constitute formal rulemaking and safe harbor rules remain forthcoming, it reflects a notable shift toward regulatory coordination and away from enforcement‑driven policymaking.
SEC Chairman Paul Atkins emphasized that the interpretation is intended to provide clearer, more predictable rules while remaining grounded in existing law. The guidance does not replace or supersede Supreme Court precedents, including the 1946 Howey decision, which established the Howey Test for securities, but instead explains how those principles apply to crypto assets given their technological and economic features.
The SEC’s Five‑Category “Token Taxonomy”
The interpretation identifies five general categories of crypto assets, acknowledging that some tokens may fall into more than one category or outside the framework altogether.
The guidance makes clear that digital securities are the only category clearly within the SEC’s regulatory perimeter. These assets are traditional securities, such as equity or debt instruments, which are formatted as or represented by crypto assets, with ownership recorded on a blockchain.
The guidance indicates that digital commodities, digital collectibles, and digital tools are generally not securities because they lack intrinsic economic rights. Digital commodities derive value from the programmatic operation of a decentralized or functional crypto system and are often integral to network operations, such as paying transaction fees. Digital collectibles, including NFTs, are designed to be collected or used and may convey limited intellectual property rights. The SEC clarified that creator royalties alone do not convert collectibles into securities, though fractionalization tied to profit‑seeking efforts could implicate securities laws. Digital tools serve practical functions, such as providing access, credentials, or membership, with value tied to utility rather than investment potential. Finally, stablecoins are carved out from securities laws under the federal stablecoin framework established by the GENIUS Act, provided they maintain a stable value and are fully backed.
When Tokens Become Investment Contracts (Securities)
The guidance emphasizes that even a token that is not itself a security may be sold as part of an investment contract. This determination turns largely on how the token is offered and promoted. Under the guidance, a token that is not itself a security may become subject to securities laws if it is sold in a manner that creates a reasonable expectation of profits based on the issuer’s ongoing managerial efforts, consistent with the Howey Test analysis.
Relevant considerations include whether representations were made by the issuer rather than third parties, whether they were made at or before the time of sale, and whether the issuer communicated a concrete and actionable business plan. Vague promotional statements or post‑sale communications generally do not create an investment contract. The guidance also clarifies that common crypto activities such as mining, staking, wrapping, and airdrops typically do not constitute securities transactions when the underlying token is a non‑security.
Investment Contracts Can End
A central feature of the interpretation is its recognition that investment contracts are not perpetual. A token sold as part of an investment contract may cease to be a security once the issuer has fulfilled or can no longer reasonably be expected to fulfil the promises that created the investment contract. At that point, downstream token transactions may fall outside the scope of federal securities laws, depending on the surrounding facts and disclosures.
This principle is particularly significant for mature networks where development is complete, control has dispersed, and purchasers no longer rely on a core team’s managerial efforts.
Coming Safe Harbors and Legislative Context
Chairman Atkins also previewed forthcoming proposed rules that would establish safe harbors for crypto projects seeking to raise capital in the United States. These include a time‑limited startup exemption, a higher‑threshold fundraising exemption with enhanced disclosures, and a rule‑based safe harbor clarifying when a crypto asset is no longer a security.
While the interpretation provides meaningful near‑term clarity, Atkins emphasized that comprehensive and durable regulation ultimately depends on congressional action, including passage of the pending Clarity Act. In the interim, guidance offers companies a clearer framework for assessing regulatory risk and structuring compliant digital asset activities.
Comments may be submitted to the SEC using the following methods:
For electronic comments, submit comments using https://www.sec.gov/comments/s7-2026-09/application-federal-securities-laws-certain-types-crypto-assets-certain-transactions-involving#no-back
For email comments, send an email to rule-comments@sec.gov and include File Number S7-2026-09 on the subject line.
For paper comments, send paper comments to Vanessa A. Countryman, Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
If you would like to submit a comment with the support of legal counsel or have questions concerning the legal landscape surrounding cryptocurrency assets and transactions, please contact Wesley Nissen, Gregory Grove, Sylvia Wolak, or your Neal Gerber Eisenberg attorney.
The content above is based on information current at the time of its publication and may not reflect the most recent developments or guidance. Neal, Gerber & Eisenberg LLP provides this content for general informational purposes only. It does not constitute legal advice, and does not create an attorney-client relationship. You should seek advice from professional advisers with respect to your particular circumstances.
