On March 17, 2026, the US Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) issued a joint interpretation clarifying how federal securities laws apply to certain crypto assets and crypto transactions. After more than a decade of regulatory ambiguity regarding digital assets, the guidance delivered a major step toward what the crypto industry has long awaited: a clear framework defining how specific digital assets are treated by federal law.
Let’s explore some of the specifics of this pivotal guidance, and what it might mean for investors.
What does the SEC and CFTC's latest guidance for digital assets say?
The guidance separates digital assets into 5 distinct categories based on their characteristics, uses, and functions—4 of which are not treated as securities.
Below is a summary for each category.
- Digital commodities. A crypto asset that's linked to and derives value from the operation of a crypto system, rather than the expectation of profits. The guidance specifically mentions bitcoin (BTC), ethereum (ETH), Solana (SOL), and 15 other cryptocurrencies. Digital commodities are not treated as securities.
- Digital collectibles. Crypto assets that are designed to be collected, and may represent or convey rights to artwork, music, videos, trading cards, in-game items, memes, characters, or cultural content. NFTs and memecoins may fall under this category. Digital collectibles are not treated as securities.
- Digital tools. Crypto assets that perform a practical function, like representing proof of a membership, ticket, credential, and other similar use cases. Digital tools are not treated as securities.
- Stablecoins. Crypto assets designed to maintain a stable value equivalent to its pegged asset. Payment stablecoins under the GENIUS Act are not securities.
- Digital securities. Digital assets issued as investment contracts with promises of future profits. Includes tokenized securities (i.e., traditional financial instruments that are traded on a blockchain, including tokenized stocks and bonds). Unsurprisingly, digital securities are treated as securities.
The guidance establishes how a legal standard called the Howey Test—which defines whether a transaction qualifies as an investment contract, and therefore a security—applies to digital assets. It makes clear that a digital asset can start out as a security and "graduate" from that status if there is no longer a reliance on the efforts of the issuer to derive value for the asset. In other words, securities status is not permanent, which has widespread implications for many aspects of crypto, and especially for DeFi.
In addition to the categories above, the guidance also clarifies that the following crypto activities are not securities transactions, and thus lie outside of the SEC’s jurisdiction:
What investors might want to consider
First, it should be noted that this guidance is not a new law, but rather a statement of how the commissions interpret existing law. It is binding on the SEC and CFTC staff in that they must administer the law consistently with this interpretation, and that it carries persuasive weight in any enforcement or litigation context. Additional rule change proposals, as well as the CLARITY Act (currently being debated in the Senate), could turn the details from this guidance into law. But it remains to be seen whether they are passed.
As such, investors should not buy crypto expecting that future values will go up based on this release alone. And in general, this also applies to guidelines that do make it into law. While the crypto industry has certainly welcomed this guidance, it does not necessarily mean prices will climb higher over any given time horizon. Remember that if the market has been anticipating favorable legislation, bullish momentum has often already been factored into the current price.
Nevertheless, the crypto industry has nearly uniformly embraced the guidance, seen as a validation of years of advocacy. Perhaps the most significant implication is that it may open the door for more institutional investors to buy crypto, as they face fewer restrictions for holding commodities-classified digital assets compared to holding securities-classified digital assets.
Ultimately, remember that crypto can be volatile, and managing your holdings requires understanding of crypto cybersecurity. In general, crypto may be more susceptible to market manipulation than securities, and direct investments in crypto do not benefit from the same regulatory protections applicable to registered securities. Also, the future regulatory environment for crypto is currently uncertain.
In light of this, if you've decided crypto is right for your portfolio, you should only buy crypto with an amount you can afford to lose.