SEC and CFTC Clarify Crypto Token Classification in Historic Joint Guidance

The U.S. Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) have released joint guidance that clarifies when crypto tokens cease to be securities, introducing a dynamic framework that could expand institutional participation.

According to industry experts, the interpretation sets out how digital assets may fall in and out of securities classification depending on the presence of ongoing managerial promises. The guidance establishes that 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, said the framework introduces a fundamental shift in how legal analysis is applied to digital assets. 'This is the clarity the industry has been waiting for,' she noted, emphasizing that the investment contract can fall away as promised milestones are met, but it can also re-emerge if new promises are introduced.

Avery Ching, co-founder and CEO of Aptos Labs, said the joint guidance resolves a critical question around secondary market activity. 'SEC and CFTC speaking jointly today provided much needed clarity with their interpretive release,' he said. The ability to treat certain tokens as commodities rather than securities is expected to reduce compliance barriers, potentially accelerating the rollout of crypto products across traditional financial platforms.