Ten years of regulation finally clarified, a victory for the native logic of cryptocurrencies

Written by: BlockBeats

BTC, ETH, SOL, XRP, DOGE, SHIB.

These names were first simultaneously included in SEC regulatory documents, with a few words added after them: not securities.

On the evening of March 17, 2026, the SEC and CFTC jointly released a 68-page explanatory document, officially providing a systematic classification of the securities nature of crypto assets. This is the first time at the federal level in the United States that specific tokens have been named and classified through an official regulatory interpretation. The document also replaces the SEC’s outdated 2019 “Investment Contract Analysis Framework,” which was previously the main reference for industry compliance.

There is a clear timeline leading up to this document.

In January 2025, SEC Acting Chair Mark T. Uyeda established the Crypto Task Force to clarify the application boundaries of securities law to crypto assets. In July of the same year, the Presidential Digital Asset Market Working Group issued a report recommending that the SEC and CFTC use their existing powers to provide regulatory clarity for the industry.

SEC Chair Paul S. Atkins then launched Project Crypto, which was upgraded to a joint SEC-CFTC initiative in January 2026. During this period, the Crypto Task Force received over 300 public comments from issuers, investors, law firms, auditors, and other stakeholders.

In other words, this document is the “unified answer” from two federal regulators after more than a year of industry negotiations and policy coordination.

Five lines, drawing the entire map

In this document, the SEC divides crypto assets into five categories. The core criterion is based on the four elements of the Howey Test.

The first category is “Digital Commodities.” This is the most attention-grabbing part of the document because the SEC provides a specific list of tokens. BTC, ETH, SOL, XRP, ADA, AVAX, DOGE, SHIB, LINK, DOT, LTC, BCH, HBAR, XLM, XTZ, APT are explicitly listed in the main text. Footnotes also mention that Algorand (ALGO) and LBRY Credits (LBC) fall into this category.

The SEC’s reasoning is that these tokens derive their value from their functional blockchain systems’ programmed operation, driven by supply and demand, rather than from expectations of profits from others’ managerial efforts.

The second category is “Digital Collectibles.” CryptoPunks, Chromie Squiggles, WIF (dogwifhat), VCOIN are named. Meme coins also find their place here; the SEC considers their value to be driven by “art, entertainment, social, or cultural significance,” similar to physical collectibles, and not securities.

The third category is “Digital Tools.” ENS domain names and CoinDesk’s Microcosms NFT tickets are cited as examples. These assets perform actual functions, such as membership credentials, identity markers, or property rights, many of which are non-transferable and tied to a specific individual.

The fourth category is “Stablecoins.” According to the already enacted GENIUS Act, “payment-type stablecoins” issued by compliant issuers are explicitly excluded from the definition of securities. However, the SEC retains jurisdiction over stablecoins that do not meet these standards.

The fifth category is “Digital Securities.” This is the only category explicitly recognized as securities. However, the SEC did not name any specific tokens as belonging to this class in the document.

The boundaries between these five categories are not absolute. The SEC itself admits that there are hybrid assets crossing categories and crypto assets that do not fit into any category. But the significance of this classification framework is that it, for the first time, moves the question of “what is a security and what is not” from courtroom debates into the realm of regulatory enforcement.

Four types of on-chain activities, unified classification

Beyond token classification, another major contribution of this document is the unified classification of four core on-chain activities: mining, staking, wrapping, and airdrops.

Protocol mining does not constitute a securities offering. Whether solo mining or joining a mining pool, the activity itself is network maintenance, and the newly minted tokens are protocol-level programmed rewards, not involving investment contracts.

Protocol staking does not constitute a securities offering. This applies to four scenarios: individual staking, delegating to a third party while retaining control of keys, entrusting staking to a custodian, and liquid staking. The SEC explicitly states that staking rewards come from protocol pre-set programmed distributions, not from managerial efforts. For liquid staking tokens (like stETH), the SEC considers them merely receipts of the underlying staked assets, not derivatives or securities.

Asset wrapping does not constitute a securities offering. Wrapping BTC into WBTC on Ethereum is just a technical interoperability operation, not changing the nature of the underlying asset.

Airdrops do not constitute securities offerings. As long as recipients do not provide funds, goods, or services as consideration, free token distributions do not meet the “investment of funds” element of the Howey Test.

The immediate impact of these judgments is that core DeFi mechanisms—staking, wrapping, and airdrops—are now outside the scope of securities law. Projects that have been worried about regulatory issues over the past three years regarding staking services or airdrops now have a unified answer from federal regulators.

Securities status is not a permanent label

Perhaps the most detailed part of this document is SEC’s explanation of the “Separation” mechanism. It explicitly states that a crypto asset that is not a security by itself can be classified as a security if issued via an investment contract. But when the conditions of the investment contract are no longer met, the asset can “separate” from its security status.

SEC provides two scenarios for this separation. The first is when the issuer fulfills its promises. For example, if a project promises to develop a decentralized network during an ICO, and once the network is launched and operates decentralization, investors no longer rely on the issuer’s managerial efforts for profit, the core elements of the Howey Test are no longer satisfied, and the token “graduates” from being an investment contract.

The second, more interesting scenario is when the project “abandons” its promises. If the issuer ceases to fulfill its commitments and statements made during the investment contract, investors’ reasonable expectations of profits from others’ efforts are shattered, and the investment contract relationship terminates. But the SEC emphasizes that this does not mean the issuer can escape liability; they may still face fraud charges.

The true significance of this “Separation” mechanism is that it provides a compliant pathway for crypto projects. From ICOs to mainnet launches and full decentralization, it’s no longer a legal gray area but a clear regulatory tunnel with an endpoint. Once completed, you are out.

This 68-page document, with nine chapters, 18 named tokens, six classified on-chain activities, and two “graduation” paths, reflects over a year of collecting more than 300 comments and working jointly with the CFTC. It’s not perfect—boundaries for stablecoins remain fuzzy, no specific examples are given under “Digital Securities,” and standards for hybrid assets are still open to interpretation.

But for an agency long criticized for “enforcing regulations instead of creating them,” this document at least accomplishes one thing: it puts rules on paper, not just in lawsuits.