The Securities and Exchange Commission’s (SEC) recent interpretation of crypto assets marks an important step toward more transparent regulations. While this is a positive development, there are still bigger questions about how the market is structured. Working together with the Commodity Futures Trading Commission (CFTC), the guidance provides helpful explanations on how federal securities laws relate to different crypto activities like airdrops and staking. 

SEC Chairman Paul S. Atkins described the move as a much-needed correction, explaining, “After more than a decade of uncertainty, this interpretation will help provide market participants with a clear understanding of how the Commission treats crypto assets under federal securities laws.” The guidance offers a new token taxonomy and provides clarity on when a crypto asset might be considered an investment contract, and when it might no longer be classified as one. “This effort serves as an important bridge for entrepreneurs and investors as Congress works to advance bipartisan market structure legislation,” stated Atkins. 

At the same time, the interpretation highlights a closer connection within the institution. CFTC Chairman Michael S. Selig shared that “the wait is over,” underlining everyone’s shared dedication to creating “workable, harmonized regulations for the new frontier of finance.”