The U.S. Securities and Exchange Commission (SEC) today released an interpretive statement clarifying how federal securities laws apply to certain crypto assets and related transactions. This is an important step for the Commission to further clarify the regulatory scope regarding crypto assets, while also aligning with Congress's efforts to incorporate a comprehensive market structure framework into legislation. The U.S. Commodity Futures Trading Commission (CFTC) jointly released this statement, clearly stating that the CFTC and its staff will enforce the provisions of the Commodity Exchange Act based on this interpretation.

SEC Chair Gary Gensler stated: "After over a decade of uncertainty, this interpretation will provide market participants with a clear understanding of how the Commission defines crypto assets under federal securities law. Regulators should do this: delineate clear boundaries with clear language. This document also acknowledges a fact that the previous administration refused to recognize — that most crypto assets themselves are not securities. Additionally, it reflects the reality that investment contracts can be terminated. As Congress advances bipartisan market structure legislation, this effort builds an important bridge for entrepreneurs and investors. I look forward to working with CFTC Chair Rostin Behnam to implement related rules soon."

CFTC Chair Rostin Behnam stated: "For too long, America’s builders, innovators, and entrepreneurs have been waiting for clear guidance on the positioning of crypto assets under federal securities and commodities law. Today's release of this interpretation means the wait is over. Chair Gensler and I are committed to creating a clear and rational regulatory environment that allows the crypto industry to thrive in the U.S. Today, the joint action of our two agencies reflects our shared commitment to creating viable and coordinated regulatory rules for this new area of finance."

This SEC interpretation highlights:

• A consistent token classification system for digital commodities, digital collectibles, digital tools, stablecoins, and digital securities.

• An explanation of how non-securities crypto assets may fall under investment contract regulation and how they may no longer be bound by investment contract constraints.

• A clear application of federal securities laws concerning activities such as airdrops, protocol mining, protocol staking, and the wrapping of non-securities crypto assets.

From innovators and issuers to individual investors, all market participants should read this interpretation to better understand the regulatory division between the SEC and CFTC. The interpretation will be formally published on the SEC’s official website and in the Federal Register.

Golden Finance has compiled the full text of this document and summarized the key points as follows:

1. Background and Regulatory Motivation

1. The SEC has been regulating crypto assets for over ten years, and the 2017 DAO Report was the first to apply the Howey test to crypto assets to determine that some of them are investment contracts (securities). Since then, the SEC has mainly regulated through enforcement actions, which has been criticized as "enforcement-style regulation," leading the market to call for a clear regulatory framework.

2. In January 2025, the SEC established a Crypto Task Force, collecting over 300 public comments and holding multiple roundtable discussions; in July 2025, the White House Digital Assets Working Group released a report suggesting that the SEC and CFTC collaborate to provide clarity in regulation. Subsequently, the SEC launched "Project Crypto," which transitioned into a joint initiative of the two agencies in January 2026.

3. The decentralized nature, diverse types, and technological iteration of crypto assets have led to disputes over the application of the Howey test. Market participants urgently need clear regulatory guidance, and this rule aims to define clear regulatory boundaries, balancing innovation and investor protection.

2. Core Legal Basis and Key Definitions

(1) Core Test: Howey Test

The three elements to determine whether a contract/transaction is an investment contract (core type of security):

1. Investment of money;

2. Common enterprise;

3. Expectation of profits to be derived from the efforts of others. Note: The SEC makes it clear that subsequent court rulings have confirmed that "common enterprise" is a necessary element, and only core managerial efforts (management actions that affect the success or failure of the enterprise) satisfy the third element; administrative/transactional work is not included.

(2) Key Term Definitions

1. Crypto Asset: A digital representation of value based on a secure decentralized ledger, consistent with the definition of "digital assets" in the GENIUS Act;

2. Crypto Systems: Crypto networks (blockchain/decentralized ledger) + crypto applications (software running on the network);

3. On-chain/Off-chain: Transactions processed/recorded directly on a crypto network are on-chain; otherwise, they are off-chain;

4. Essential Managerial Efforts: Key management actions that influence the success or failure of crypto assets/systems, distinct from administrative, transactional, or technical support work.

3. Five Classifications of Crypto Assets and Determination of Securities Attributes

Based on characteristics, uses, and functions, crypto assets are divided into five categories: digital commodities, digital collectibles, and digital tools are not securities; stablecoins depend on the type; digital securities are securities, while non-securities crypto assets may be considered investment contracts (securities) based on the method of issuance.

(1) Digital Commodities

1. Core Characteristics: Value derived from the programmed operation of crypto systems + supply and demand relationships, with no passive income, future revenue/profit sharing, or economic rights; they are a necessary component of the operation of a crypto system;

2. Core Functions: Verify transactions, maintain network security, pay gas fees, participate in governance/staking, etc.;

3. Examples: Bitcoin (BTC), Ethereum (ETH), XRP, Solana (SOL), etc. (all are underlying commodities for futures contracts under CFTC regulation);

4. Securities Attributes: Not securities; the CFTC clarifies they can qualify as "commodities" under the Commodity Exchange Act.

(2) Digital Collectibles

1. Core Characteristics: Used for collection/use, representing artwork, game items, emoji packs, etc., without the aforementioned economic rights; value derives from supply and demand, scarcity, and reputation;

2. Examples: CryptoPunks, Chromie Squiggles, Fan Tokens, WIF, etc.;

3. Special Circumstances: Digitally collectible assets issued in fractional form may constitute investment contracts (securities) if profit expectations arise from others' core managerial efforts;

4. Securities Attributes: Not securities.

(3) Digital Tools

1. Core Characteristics: Having practical functions (membership, tickets, identity credentials, domains, etc.), often non-transferable/"soul-bound," value derives from functional practicality without the aforementioned economic rights;

2. Examples: Ethereum Name Service (ENS), CoinDesk's Microcosms NFT conference tickets;

3. Securities Attributes: Not securities.

(4) Stablecoins

1. Regulatory Framework: The 2025 GENIUS Act establishes a dedicated regulatory framework for "payment stablecoins." Once enacted, payment stablecoins issued by licensed issuers are legally excluded from securities attributes and are prohibited from paying interest/profits to holders;

2. Non-Payment Stablecoins: Whether they are securities is determined based on specific facts;

3. Transitional Rules: Prior to the enactment of the act, the SEC determined that the issuance and redemption of "covered stablecoins" do not constitute securities issuance/transactions.

(5) Digital Securities

1. Core Characteristics: Tokenization of financial instruments defined by securities laws (stocks, bonds, etc.) with ownership records stored wholly or partially on a crypto network, also known as "tokenized securities";

2. Two Types: Securities directly tokenized by issuers and third-party-issued securities linked to underlying securities;

3. Securities Attributes: They are inherently securities, and whether issued on-chain or off-chain is subject to federal securities law regulation.

4. Circumstances Under Which Non-Securities Crypto Assets Become Investment Contracts (Securities) and Regulations for Termination

(1) Core Conditions for Becoming Investment Contracts

The issuer, through clear statements/commitments, induces investors to invest money to participate in a common enterprise, and investors have a reasonable expectation of profits derived from the issuer's core managerial efforts, thus satisfying the three elements of the Howey test.

1. Requirements for Statements/Commitments: Must be clear and specific, including business plans, milestones, resource planning, etc. Vague commitments do not constitute;

2. Channels for Statements/Commitments: Issuer's official website, official social media, white papers, regulatory documents, direct communication, etc.; statements not authorized by third parties are invalid;

3. Timing Requirements: Statements/commitments must be made before or at the time of issuance/sale; post-sale statements do not retroactively constitute securities.

(2) Circumstances for Terminating Investment Contract Attributes (Separation of Non-Securities Crypto Assets from Issuer Statements/Commitments)

If any of the following circumstances are met, non-securities crypto assets are no longer subject to federal securities law regulation, and previous investment contracts terminate:

1. Issuer Fulfillment of Statements/Commitments: Completion of core managerial efforts (such as developing the crypto system's functions, achieving decentralization), and subsequently providing only administrative/transactional work;

2. Issuer Fails to Fulfill Statements/Commitments: If the issuer publicly and broadly announces abandonment of the project or fails to take any core managerial efforts after a reasonable time, investors lack reasonable profit expectations;

3. Separation of Secondary Market Transactions: Secondary market investors cannot reasonably expect the issuer's statements/commitments remain associated with that crypto asset.

(3) Important Legal Consequences

1. When non-securities crypto assets become investment contracts, it does not change the non-security property of the assets themselves; only the transactions constitute securities transactions;

2. If the issuer does not register the issuance under securities law or does not use exemption provisions, even if the assets subsequently separate from the investment contract, legal responsibilities still apply;

3. Any false statements/significant omissions made by the issuer during the duration of the investment contract incur anti-fraud liability.

5. Securities Law Applicability Determination for Specific Crypto Asset Activities

The SEC clarifies that four common activities — protocol mining, protocol staking, wrapping, and airdrops — do not constitute securities issuance/transactions, provided they meet the described conditions, and participants do not need to register or apply exemption provisions.

(1) Protocol Mining (PoW Consensus Mechanism)

1. Core Actions: Miners invest computing resources to verify PoW network transactions and generate blocks, receiving crypto asset rewards, including independent mining and pool mining;

2. Regulatory Conclusion: Non-securities transaction, because mining is an administrative/transactional task, profits derive from the miners' own investment, not from others' core managerial efforts; the work of pool operators is also transactional, and miners are not profiting dependent on the pool operator's core managerial efforts.

(2) Protocol Staking (PoS Consensus Mechanism)

1. Core Actions: Node operators stake PoS network's native digital commodities to become validators verifying transactions, receiving block rewards and transaction fees, including independent staking, third-party self-custody staking, custodial staking, and liquidity staking;

2. Staking Receipt Tokens: Represent the staked digital commodities and returns; if the underlying assets are non-securities and do not constitute investment contracts, those tokens are not securities;

3. Ancillary Services: Insurance guarantees, early unlocking, return payment adjustments, asset aggregation, all are transactional work and do not constitute core managerial efforts;

4. Regulatory Conclusion: Non-securities transaction, as staking is administrative/transactional work, profits arise from the staking behavior itself, and the service provider's work lacks core managerial attributes.

(3) Wrapping

1. Core Actions: Depositing crypto assets into a custodian/cross-chain bridge to receive 1:1 corresponding "Redeemable Wrapped Tokens," with underlying assets locked and tokens being redeemable and subject to destruction on a 1:1 basis;

2. Regulatory Conclusion: If the underlying assets are non-securities and do not constitute investment contracts, the wrapping tokens are not securities, as wrapping is administrative work, and tokens merely represent ownership of the underlying assets without any additional profit expectations, thus not meeting the Howey test.

(4) Airdrops

1. Applicable Situations: Issuers distribute non-securities crypto assets to recipients without requiring any payment, goods, services, or other consideration (past considerations that are unrelated to the airdrop also apply);

2. Exclusion Situations: If recipients provide consideration to receive the airdrop (such as completing social tasks or purchasing specific assets), it may constitute a securities transaction;

3. Regulatory Conclusion: Non-securities transaction, as the "investment of money" element of the Howey test is not met; the issuer did not exchange the airdrop for consideration.

6. CFTC Complementary Regulatory Guidelines

1. The CFTC will execute the Commodity Exchange Act based on the SEC's interpretation, clarifying that non-securities crypto assets (except licensed payment stablecoins) may be recognized as "commodities" and subject to CFTC regulation;

2. The regulatory authority of both agencies remains unchanged; the SEC is responsible for securities-related crypto assets, while the CFTC oversees commodity-related crypto assets, working together to achieve unified regulation of the crypto asset market.

7. Economic Impact and Regulatory Objectives

(1) Positive Impacts

1. Reduction of regulatory uncertainty, lowering legal compliance costs for market participants, facilitating capital formation and innovation related to crypto assets;

2. Clear regulatory boundaries will encourage crypto asset activities to remain within the U.S., avoiding market migration;

3. Improved pricing efficiency of crypto assets, reducing price distortions caused by regulatory ambiguity;

4. Promotion of competition and advancement of blockchain/decentralized ledger technology development.

(2) Potential Costs

1. Some previously non-compliant securities crypto asset issuers will need to adjust business practices, incurring compliance and registration costs;

2. A few issuers may abandon issuance due to compliance costs or adjust the format of crypto asset issuance.

(3) Core Regulatory Objectives

1. Provide market participants with clear rules on the applicability of securities laws, distinguishing between securities and non-securities crypto assets;

2. Protect investors, ensuring that securities-related crypto assets are regulated under federal securities laws while encouraging innovation in non-securities crypto assets;

3. Establish a collaborative regulatory framework between the SEC and CFTC to achieve orderly development of the crypto asset market.

8. Public Comments and Rule Amendments

1. The SEC is publicly soliciting comments on this interpretation, with channels for submission including SEC website forms, emails, and paper mail;

2. The SEC will refine, amend, or expand this interpretation based on public comments, further enhancing the regulatory framework for crypto assets.