On March 17, 2026, the U.S. Securities and Exchange Commission (SEC) issued an interpretive release addressing the application of the federal securities laws to crypto assets and related transactions. The Commodity Futures Trading Commission (CFTC) joined the interpretation and indicated it will administer the Commodity Exchange Act (CEA) consistent with the SEC’s approach, reflecting a coordinated regulatory position across the two agencies.
The release represents the most significant step by the SEC to date in clarifying the application of existing federal securities law principles to crypto assets. In remarks delivered the same day at The Digital Chamber’s Blockchain Summit, SEC Chairman Paul S. Atkins outlined a potential framework – referred to as “Regulation Crypto Assets” – that could include tailored exemptions and a safe harbor for certain crypto-related offerings.
Interpretive Guidance – Application of Existing Law
The release reflects the Commission’s views on how existing law – including the test set forth in SEC v. W.J. Howey Co. – applies to crypto assets and transactions involving them. It does not supersede or replace Howey, which is binding legal precedent, but instead provides interpretive guidance intended to reduce uncertainty for market participants. The release also supersedes the SEC staff’s 2019 framework for digital asset analysis.
As an interpretive release, the guidance represents the Commission’s current position and is expected to be applied by the SEC and its staff in administering the federal securities laws, including in enforcement. The Commission is soliciting public comment and may refine the interpretation.
Token Taxonomy
The release provides a new taxonomy that describes how the Commission intends to interpret and treat different categories of crypto assets under the federal securities laws. The release identifies four categories of crypto assets that will not be considered securities under the interpretative release:
- Digital commodities: Crypto assets that are intrinsically linked to and derive value from the programmatic operation of a functional crypto system and market supply and demand dynamics, rather than from the expectation of profits from the essential managerial efforts of others.
- Digital collectibles: Crypto assets acquired primarily for personal use, consumption, or expressive purposes (e.g., NFTs), although certain structures (such as fractionalization or revenue-sharing arrangements) may implicate an investment contract analysis.
- Digital tools: Crypto assets that function as credentials, membership, access rights, or other functional instruments enabling participation in a network, application, or service.
- Payment stablecoins: Certain stablecoins, including those meeting the definition of “permitted payment stablecoins” under the GENIUS Act, which are not securities by operation of statute; other stablecoins will continue to require a facts-and-circumstances analysis.
By contrast, digital securities – financial instruments that fall within the statutory definition of “security” and are represented or recorded using distributed ledger or similar technology – remain subject to the federal securities laws. All other categories of digital assets will not be considered securities unless offered and sold as part of an “investment contract.”
The release emphasizes that the foregoing classifications depend on the economic realities of the asset and may evolve over time or reflect hybrid characteristics that fall within more than one category.
Investment Contract Analysis
The Commission addresses how a non-security crypto asset may become subject to, and how it may cease to be subject to, an investment contract. A non-security crypto asset may become subject to the federal securities laws where it is offered and sold as part of an investment contract – i.e., where there is an investment of money in a common enterprise with a reasonable expectation of profits derived from the essential managerial or entrepreneurial efforts of others, based on issuer representations or promises.
In applying this analysis, the Commission focuses on whether issuer representations are attributable, sufficiently detailed, and conveyed to purchasers before or contemporaneously through recognized channels (e.g., written or oral agreements, white papers, official websites, or filings). Explicit and unambiguous representations demonstrating the issuer’s ability to implement the proposed project, and how the issuer’s efforts are expected to generate the anticipated profits, are more likely to give rise to reasonable reliance, whereas vague or generalized statements are less likely to do so.
The release further clarifies that a non-security crypto asset sold as part of an investment contract in a primary transaction does not necessarily remain subject to that investment contract in secondary market transactions. Whether secondary transactions involve offers or sales of securities depends on whether purchasers reasonably expect the issuer’s representations or promises to remain connected to the non-security crypto asset.
Importantly, the Commission indicates that a non-security crypto asset may cease to be subject to the federal securities laws on this basis where the relevant investment contract no longer exists or terminates. This may occur where (i) the issuer has fulfilled its representations or promises to engage in essential managerial efforts, or (ii) the issuer has failed to satisfy its representations or promises.
Treatment of Network Activities
The interpretive release addresses several common crypto-related activities and states that, in the circumstances described, these activities do not involve the offer and sale of securities:
- Protocol mining and protocol staking, where participants perform validation functions and rewards are determined by protocol rules rather than managerial discretion;
- Ancillary staking services such as aggregation, slashing protection, or flexible unbonding features, which do not, in themselves, constitute the type of managerial efforts that give rise to an investment contract;
- Staking receipt tokens, where tokens merely evidence ownership of deposited non-security crypto assets (although receipt tokens relating to digital securities or assets subject to an investment contract may themselves be securities);
- Wrapping of non-security crypto assets into one-for-one redeemable representations that do not introduce profit expectations or discretionary management; and
- Certain airdrops or similar distributions of non-security crypto assets that do not involve an “investment of money” under Howey, where recipients provide no consideration; however, arrangements involving quid pro quo or required actions may fall outside this analysis.
Chairman Atkins’s Remarks – Potential Exemptions and Safe Harbor
In remarks delivered at The Digital Chamber’s 2026 Blockchain Summit in tandem with the release, Chairman Atkins outlined a potential rulemaking framework – referred to as “Regulation Crypto Assets” – that would build on the interpretive guidance and draw from Commissioner Hester Peirce’s prior “Token Safe Harbor” proposal.
The framework contemplates several potential pathways for compliant capital formation:
- Startup exemption: A time-limited exemption (potentially up to approximately four years) that would allow early-stage crypto projects to raise a capped amount of capital (e.g., on the order of $5 million) while working to reach network maturity. The exemption would be non-exclusive and accompanied by principles-based disclosures about the investment contract and underlying crypto asset, with notice filings upon relying on the exemption and when exiting.
- Fundraising exemption: A separate exemption that could permit larger capital raises (e.g., up to approximately $75 million in a 12-month period), subject to enhanced disclosures, including financial condition and financial statements.
- Investment contract safe harbor: A rule-based framework intended to provide greater certainty as to when a crypto asset would no longer be subject to the federal securities laws following the completion or cessation of the essential managerial efforts that the issuer represented or promised that it would engage in under the investment contract.
These concepts have not yet been proposed formally by the Commission within any release or interpretative guidance and remain conceptual and non-binding. However, they do set out a potential framework for further discussion and rule proposals. In a possible indication of further regulatory actions, CFTC noted in joining the interpretation that certain non-security crypto assets could be within the definition of “commodity” under the CEA.
Conclusion
The SEC’s interpretive release provides the clearest structured framework to date under U.S. federal securities laws for evaluating crypto assets. While the guidance does not alter the underlying legal standard, it offers insight into how the Commission intends to apply these principles in the crypto asset context. Chairman Atkins’ remarks further suggest that additional regulatory developments may follow, including potential exemptions and safe harbor concepts that could shape future rulemaking.
