Joint SEC-CFTC Guidance Redefines Crypto Asset Classification

The U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have jointly issued new guidance on the classification of digital assets, introducing a dynamic framework that could expand institutional participation in the crypto market.

The clarification sets out how digital assets may fall in and out of securities classification depending on ongoing managerial promises, addressing a long-standing ambiguity that has shaped market behavior in the U.S. According to the guidance, a crypto asset is not inherently a security, but may be tied to an 'investment contract' depending on how it is marketed and the expectations set by issuers.

Mari Tomunen, general counsel at DoubleZero, noted that the framework introduces a fundamental shift in how legal analysis is applied to digital assets. The test is not static, and the investment contract can fall away as promised milestones are met, but it can also re-emerge if new promises are introduced in connection with new sales of an existing token.

The ability to treat certain tokens as commodities rather than securities could reduce compliance barriers, potentially accelerating the rollout of crypto products across traditional financial platforms. Avery Ching, co-founder and CEO of Aptos Labs, said that the joint guidance resolves a critical question around secondary market activity, particularly for assets like APT, Bitcoin (BTC), and Ether (ETH) that have been explicitly named as digital commodities.