SEC and CFTC Issue Joint Guidance on Crypto Asset Classification

The U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) jointly released interpretive guidance on March 22, 2026, clarifying how they will determine whether a cryptocurrency is considered a security. This move follows a Memorandum of Understanding (MOU) signed by the agencies to foster collaboration and innovation although protecting investors and maintaining market integrity [SEC and CFTC MOU].

Defining Digital Securities

The guidance outlines several categories of crypto assets. One key category is “digital securities,” defined as cryptocurrencies that meet the existing definition of a security, but are tokenized. According to the SEC, if a crypto asset meets the criteria of the Howey Test, it will be classified as a security and subject to SEC oversight.

Other Crypto Asset Categories

Beyond digital securities, the guidance identifies other categories including payment stablecoins, digital instruments, digital collectibles, and digital commodities. These are generally not considered securities unless issuers or operators engage in activities that fall under securities regulations, such as splitting the tokens.

Agency Collaboration and Enforcement

SEC Chair Paul Atkins, along with Commissioners Hester Peirce and Mark Uyeda, emphasized the simple taxonomy established to clarify the application of the Howey Test to crypto assets [CoinDesk Report]. The CFTC has stated its commitment to enforcing the guidelines under the Commodities Exchange Act. The agencies encourage market participants to review the interpretation to understand the regulatory jurisdictions of each commission [Jenner & Block Analysis].

Legislative Considerations

Representative Troy Downing (R-Mont.) acknowledged the guidance as a positive step but stressed the need for congressional legislation to establish a clear market structure, noting that future administrations could overturn the interpretive guidance.

Industry Reaction

Legal experts, such as Chris LaVigne of Withers, suggest the guidelines “predictably conclude that most crypto assets and many common crypto assets are not securities,” while acknowledging the SEC retains some enforcement discretion. Jason Gottlieb of Morrison Cohen highlighted the ongoing uncertainty regarding the definition of “commodities” and the need for legislative clarity to grant the CFTC jurisdiction over non-security cryptocurrencies.

Predictive Markets and Enforcement Actions

The week also saw enforcement actions related to predictive markets. Kalshi, a platform offering prediction markets, was ordered to halt most of its operations in Nevada pending a hearing. Arizona filed criminal charges against Kalshi, alleging violations of state law related to election contracts and other bets. Senator Catherine Cortez-Masto criticized predictive markets for potentially violating state and tribal laws.

Looking Ahead

Discussions regarding market structure legislation are ongoing, with potential progress expected in late April. Ethical considerations and quorum requirements within regulatory agencies are also being addressed. The SEC and CFTC’s joint guidance represents a significant step toward clarifying the regulatory landscape for crypto assets, but further legislative action may be necessary to provide long-term certainty.