The guidance explains paths for when a crypto asset could be deemed a security, and outlines regulatory considerations for mining, protocol staking, and airdrops.

The framework emphasizes that most crypto assets are not securities, including those involved in staking, airdrops, and protocol mining.

There is a leadership shakeup at SEC enforcement, with Margaret Ryan resigning and Sam Waldon stepping in as acting enforcement director, prompting discussion about a shift in agency focus.

Republican commissioners Atkins, Uyeda, and Peirce remain as bipartisan governance at the SEC, while the White House has not yet named new nominees for SEC or CFTC chairs.

Officials describe the move as clarifying regulatory jurisdiction between the SEC and CFTC, aligning with congressional efforts to codify oversight through market-structure legislation.

The stance marks a shift from the prior administration’s aggressive crypto regulation approach, including enforcement actions against major crypto firms.

Legislation like the CLARITY Act is ongoing, with the SEC and CFTC cooperating to clarify crypto rules independent of new statutes.

The guidance hints at a possible safe harbor for certain projects, potentially applying to startups under $5 million in early years or fundraising up to $75 million, with exemptions possibly ending when essential managerial efforts cease.

A new guidance from the SEC and CFTC clarifies which digital assets are securities, carving out stablecoins, digital collectibles, and digital commodities as non-securities while outlining how a non-security could become a security.

Digital commodities such as Bitcoin and Ethereum are evaluated by whether value comes from the system’s operation rather than investors’ efforts.

Non-security crypto assets may still be investment contracts in some issuer representations, but that does not automatically make the asset a security in secondary markets.

The guidance seeks alignment between the SEC and CFTC, with the CFTC committing to administer the Commodity Exchange Act in step with the SEC’s interpretation.