SEC and CFTC Issue Joint Token Taxonomy – Most Crypto Assets Are Not Securities

The U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission have jointly released interpretive guidance formally classifying most crypto assets as non-securities, ending years of enforcement-driven ambiguity.

What the Token Taxonomy Actually Does

The guidance, shared on SEC’s official website, establishes five distinct asset categories, each carrying a defined regulatory status. Four of the five fall outside securities law entirely.

Digital commodities – assets deriving value from decentralized, programmatic systems and open market supply and demand – are classified as non-securities. Bitcoin, Ether, Solana, and XRP are cited as examples. Digital collectibles, including NFTs representing rights to artwork, music, or trading cards, carry the same status. Digital tools that function as memberships, tickets, or identity credentials, such as ENS domains, are also excluded. Payment stablecoins compliant with the GENIUS Act round out the non-security classifications.

The fifth category is digital securities: tokenized versions of traditional financial instruments like stocks or bonds. Those remain fully within SEC jurisdiction.

The Investment Contract Carve-Out

The taxonomy includes a dynamic provision that regulators will watch closely. A non-security asset can temporarily become part of a security transaction if an issuer offers it alongside promises of profit tied to managerial effort. That mirrors the existing Howey test framework.

The meaningful addition is the sunset clause. Once an issuer fulfills or fails on those promises, the security classification ends. The asset reverts to its underlying category. That is a significant structural departure from prior SEC positions, which treated the original offering terms as permanently determinative.

The guidance also explicitly states that airdrops, protocol staking, and protocol mining do not constitute the offer or sale of a security. That removes three of the most contested gray areas from the past enforcement cycle.

A Jurisdictional Split, Now Formalized

The CFTC’s co-signature on the taxonomy resolves a long-running institutional dispute. Assets classified as digital commodities fall under CFTC jurisdiction. Digital securities remain with the SEC. The framework does not eliminate jurisdictional overlap entirely, but it draws clearer lines than anything previously published.

SEC Chair Paul Atkins framed the shift directly, stating the agency is no longer treating its mandate as covering all digital assets by default. That represents a deliberate policy reversal from the posture of the prior administration, which pursued enforcement actions as the primary regulatory tool.

What the taxonomy does not resolve is how novel asset structures that do not fit cleanly into any of the five categories will be handled. The guidance addresses defined classes. It does not create a universal safe harbor for everything outside them.

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