On March 17, 2026, the Securities and Exchange Commission issued an interpretive release clarifying how federal securities laws apply to crypto assets and transactions involving those assets. The Commodity Futures Trading Commission joined the release, marking an unusually coordinated effort by U.S. financial regulators to bring structure to a market that—until now—has largely been regulated through enforcement actions rather than formal guidance.
The release represents a meaningful shift in regulatory posture. Rather than treating most crypto assets as presumptive securities, the SEC articulated a framework that distinguishes among different categories of digital assets and recognizes that many fall outside federal securities laws altogether.
A Functional Framework for Crypto Assets
The SEC’s guidance divides crypto assets into five broad categories. Four are generally not securities:
- Digital commodities, such as native tokens of functional networks whose value derives from protocol operation and market supply and demand, rather than from the managerial efforts of issuers.
- Digital collectibles, including NFTs representing artwork, gaming items, or similar expressive assets.
- Digital tools, often described as “utility tokens,” that function as access rights, memberships, or credentials.
- Payment stablecoins, provided they qualify under, and comply with, the federal stablecoin framework enacted in the GENIUS Act.
Only one category remains squarely within securities law: digital (or tokenized) securities, meaning traditional financial instruments—such as stock or debt—that are recorded or transferred using blockchain technology.
The framework reflects a return to first principles: changing the technological wrapper does not change the legal nature of the underlying instrument.
Investment Contracts Still Matter—But They Can End
The SEC emphasized that its interpretation does not replace the Supreme Court’s Howey test, which remains the governing standard for determining whether a transaction involves a security. Instead, the guidance explains how Howey applies in crypto markets.
Critically, the SEC reaffirmed that a crypto asset itself is not automatically a security. A non‑security token may be sold as part of an investment contract if purchasers are led to expect profits based on the issuer’s ongoing managerial efforts. But that status is not permanent. Once those expectations no longer reasonably persist, later transactions in the same token may fall outside securities law.
This recognition—that investment contracts can begin and end—marks an important departure from the SEC’s prior, more expansive views.
Clarification of Common Blockchain Activities
The guidance also addresses several common crypto activities, concluding that, when conducted as described, they generally do not involve securities transactions:
- Protocol mining and protocol staking
- Wrapping of non‑security crypto assets
- Certain airdrops that do not involve investment of money or profit inducement
These conclusions are fact‑dependent, but they provide long‑awaited clarity for market participants operating at the protocol level.
Coordinated Oversight and What Comes Next
Shortly before issuing the guidance, the SEC and CFTC signed a new memorandum of understanding aimed at coordinating oversight, supervision, and enforcement in crypto markets. The agreement reflects a functional allocation of responsibility, with the CFTC exercising primary oversight of secondary markets for digital commodities, such as Bitcoin and Ethereum, and the SEC focusing on capital‑raising and securities‑based activity.
In public remarks the same day, SEC Chair Paul Atkins indicated that the Commission intends to follow the interpretive release with a formal notice‑and‑comment rulemaking, potentially including exemptions and safe harbors designed to provide additional certainty for crypto‑related capital formation. Those proposals have not yet been issued.
Market Reaction
Reaction to the announcement has been mixed. Supporters view the framework as a decisive break from years of “regulation by enforcement” and predict that greater clarity will encourage onshore development and institutional participation in U.S. markets. Critics counter that the release is non‑binding guidance rather than legislation and warn that it may create gaps in investor protection, particularly where oversight shifts away from the SEC.
Former SEC Commissioner Caroline Crenshaw has argued that the new approach underestimates fraud risks that remain prevalent in crypto markets and cautioned against weakening regulatory safeguards based on interpretive guidance alone.
Bottom Line
The SEC’s crypto asset guidance represents a significant pivot away from case‑by‑case enforcement toward a more structured, functional framework. Whether it delivers durable clarity will depend on follow‑through—including formal rulemaking and, ultimately, legislation.
For now, the guidance provides insight into how the current SEC and CFTC leadership view the boundaries of securities law in crypto markets. But, as with prior interpretive shifts, its longevity remains uncertain.