SEC & CFTC Define Crypto Assets: New Guidance & ‘Token Taxonomy’ Released

SEC and CFTC Issue Joint Guidance on Crypto Asset Classification

In a landmark move for the digital asset space, the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) jointly issued interpretive guidance on Tuesday, March 16, 2026, defining how different types of crypto assets will be treated under existing federal laws. This marks the first time the SEC has attempted to clearly categorize crypto assets, a step long sought by the industry and championed by the agency’s current Chairman, Paul Atkins. The guidance, released alongside a formal agreement between the two agencies to collaborate on crypto regulation, aims to provide clarity after more than a decade of regulatory uncertainty.

Atkins, appointed by President Donald Trump, has made a pro-crypto agenda a central tenet of his leadership. He stated the modern guidance will “provide market participants with a clear understanding of how the Commission treats crypto assets under federal securities laws,” according to an SEC statement. This contrasts sharply with the approach of his predecessor, Gary Gensler, who declined to offer tailored policies for the crypto sector, leaving a significant gap in regulatory certainty.

A ‘Token Taxonomy’ and Shifting SEC Focus

The core of the new guidance is a “token taxonomy” that classifies crypto assets into four main categories: digital commodities, digital collectibles, digital tools and digital securities. Crucially, the SEC’s interpretation asserts that “most crypto assets are not themselves securities.” This represents a significant departure from previous SEC enforcement actions, which often treated a wide range of tokens as securities by default. The guidance clarifies that only “digital securities” – essentially traditional securities issued using blockchain technology – will be subject to the full scope of U.S. Securities laws.

Atkins emphasized this shift in focus at the Digital Chamber’s DC Blockchain Summit, stating, “We’re not the securities and everything commission anymore.” This comment drew applause from attendees, signaling the industry’s relief at the potential for a more nuanced regulatory approach. The SEC also clarified that investment contracts that *are* initially classified as securities don’t necessarily remain so indefinitely. An investment contract ceases to be a security when “either the issuer has fulfilled its representations or promises or the issuer has failed to satisfy its representations or promises.”

How the Guidance Impacts Different Crypto Activities

The guidance specifically addresses the treatment of common crypto activities like airdrops, protocol staking, and protocol mining, stating that the SEC’s reach does not extend to these practices. It also defines stablecoins, outlining how they will be assessed under the new framework. The CFTC, under Chairman Mike Selig, is aligning with the SEC’s taxonomy as part of a broader effort toward “harmonization” between the two agencies. Selig noted that the guidance signals “it’s time to build in the United States.”

The SEC’s interpretation hinges on whether a digital asset is offered as an investment in a common enterprise with promises of profits based on the efforts of others. If these conditions are met, it’s considered a security. Though, once those promises are fulfilled or abandoned, the asset is no longer subject to securities regulations.

The Path Forward: Rulemaking and Congressional Action

While the current guidance is interpretive and doesn’t carry the force of law, Atkins announced plans to launch a formal rulemaking process “in a week or two.” This process will involve proposing new rules and seeking public comment, with a comprehensive proposal – expected to exceed 400 pages – including an “innovation exemption” for crypto firms. This exemption could provide a safe harbor for companies developing new crypto technologies.

However, Atkins also cautioned that legislative action from Congress is ultimately needed to solidify these pro-digital asset policy shifts. He believes that new crypto laws are the only way to guarantee the permanence of the changes outlined in the guidance. This suggests the SEC is aiming to create a more stable regulatory environment, but acknowledges that long-term certainty requires Congressional involvement.

Implications for the Crypto Industry and Investors

The SEC and CFTC’s joint guidance is expected to have a wide-ranging impact on the crypto industry. By clarifying which assets are considered securities, the guidance could reduce legal uncertainty and encourage innovation. Companies operating in the crypto space will necessitate to carefully assess how their assets and activities are classified under the new framework. Investors may also benefit from increased clarity, allowing them to build more informed decisions.

The move is particularly significant given the industry’s past clashes with the SEC under Gensler, who pursued aggressive enforcement actions against several crypto firms. The new approach signals a potential shift towards a more collaborative and accommodating regulatory environment. Patomak Global Partners, the consulting firm where Atkins served as CEO before returning to the SEC, has clients across the financial and cryptocurrency industries, as noted in a NPR report, raising questions about potential conflicts of interest that will likely be scrutinized.

What to Expect in the Coming Months

The next several months will be critical for the crypto industry as the SEC moves forward with its rulemaking process. Stakeholders will have an opportunity to provide feedback on the proposed rules, and the final outcome could significantly shape the future of crypto regulation in the United States. The SEC is reportedly preparing “dozens of proposals,” including further guidance on digital assets, according to Atkins. Industry participants should closely monitor these developments and prepare to adapt to the evolving regulatory landscape. The formal relationship between the SEC and CFTC, established alongside the guidance, will also be a key factor in shaping the future of crypto regulation, fostering closer collaboration between the two agencies.