SEC Sends Crypto Asset Classification Proposal to White House for Review

The U.S. Securities and Exchange Commission (SEC) has forwarded its proposed interpretive guidance on digital asset classification to the White House Office of Management and Budget (OMB), with government records showing the proposal as “pending review” as of March 23, 2026.

The proposal, which outlines a five-category taxonomy for digital assets—digital commodities, digital collectibles, digital tools, stablecoins, and digital securities—and clarifies when a non-security crypto asset becomes subject to investment contract rules, was submitted to the OMB on March 20. If finalized, the interpretation would establish that most crypto assets are not securities under federal law and would provide regulatory clarity while Congress considers comprehensive market structure legislation.

The guidance follows a memorandum of understanding signed earlier in March between the SEC and the Commodity Futures Trading Commission (CFTC) to coordinate digital asset oversight.

Key Elements of the SEC Proposal

Five-Category Taxonomy

The SEC’s interpretive release establishes a structured framework for classifying digital assets based on their characteristics, uses, and functions:

• Digital commodities: Assets deriving value from the programmatic operation of a functional crypto system and supply-demand dynamics

• Digital collectibles: Assets, including non-fungible tokens (NFTs), that represent rights to trading cards, current events, or similar items

• Digital tools: Utility-focused tokens providing access to platform functionality

• Stablecoins: Dollar-pegged assets backed by reserves

• Digital securities: Traditional securities that are tokenized

Investment Contract Trigger

The guidance clarifies when a non-security crypto asset becomes subject to securities laws: “A non-security crypto asset becomes subject to an investment contract when an issuer offers it by inducing an investment of money in a common enterprise with representations or promises to undertake essential managerial efforts from which a purchaser would reasonably expect to derive profits.”

The framework allows a crypto asset’s regulatory status to change over time. If issuer commitments drive expectations of profit, the asset may be linked to a securities transaction. If those commitments are fulfilled or no longer relevant, that link can dissolve.

CFTC Coordination

The CFTC has stated it will administer the Commodity Exchange Act consistently with this interpretation, particularly for non-security crypto assets that may qualify as commodities. The joint approach signals an end to regulatory turf wars and establishes clearer jurisdictional boundaries between the two agencies.

Regulatory Context and Legislative Landscape

Bridge to Congressional Action

SEC Chair Paul Atkins has framed the interpretation as a bridge for entrepreneurs and investors while Congress works to advance bipartisan market structure legislation. The guidance provides interim clarity on digital asset classification pending passage of comprehensive market structure bills.

CLARITY Act Status

The Senate Banking Committee indefinitely postponed its markup of the CLARITY Act in January 2026 after Coinbase CEO Brian Armstrong stated the exchange could not support the legislation as written. Politico reported on March 20 that White House representatives and congressional lawmakers reached an “agreement in principle” on stablecoin yield—a key sticking point—that could advance the bill. As of March 23, the committee had not publicly announced a new markup date.

Legislative Priorities

Senate Majority Leader John Thune reportedly indicated in March that the chamber intends to prioritize a vote on the SAVE America Act—legislation requiring proof of U.S. citizenship for voter registration—before addressing bipartisan bills such as CLARITY.

OMB Review Process

Next Steps

With the proposal now under OMB review, the White House will assess the economic and administrative implications of the interpretive guidance. Following OMB clearance, the SEC may proceed with finalizing the interpretation or seek additional public comment.

Frequently Asked Questions

What does the SEC’s proposed crypto asset classification establish?

The SEC’s interpretive guidance establishes a five-category taxonomy for digital assets—digital commodities, digital collectibles, digital tools, stablecoins, and digital securities—and clarifies when a non-security crypto asset becomes subject to investment contract rules based on issuer promises and investor expectations of profit.

How does this proposal differ from previous SEC approaches?

The framework marks a departure from the enforcement-heavy approach under former SEC Chair Gary Gensler. Under Chair Paul Atkins, the SEC has sought to provide clear rules rather than relying on case-by-case enforcement, coordinating with the CFTC to establish consistent oversight of digital assets.

What is the relationship between this proposal and congressional legislation?

SEC Chair Atkins has described the interpretive guidance as a “bridge” for the crypto industry while Congress works to pass comprehensive market structure legislation such as the CLARITY Act. The proposal would provide interim regulatory clarity, with final legislation intended to codify a permanent framework.